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QUEST MEANS BUSINESS
Amid The Huge Prius Recall, Toyota Execs Apologize Profusely And Pledge To Work To Regain The Public's Trust
Aired February 9, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: Toyota recalls the Prius; 8.5 million cars now, and counting.
Bracing for a bailout, the markets are climbing amidst speculation that Greece will get a rescue.
And let's get back to work. The recruitment site Monster tells this show, more needs to be done.
I'm Richard Quest, I mean business.
Toyota called the Prius the next leap forward in green motoring. If you own one of these wonders of Japanese engineering, please bring it back, because now, apparently, on some models the brakes need fixing. The word from Toyota is that the defective cars only seem to have problems when they are on bumpy roads, and thankfully, traveling at low speeds, which pretty much sums up the company's own situation at the moment.
The president of Toyota says he is aiming to get things back on track and pretty sharpish, at that.
(BEGIN VIDEO CLIP)
AKIO TOYODA, PRESIDENT, TOYOTA MOTOR: Let me assure everyone that we will redouble our commitment to quality as a lifeline of our company, with myself taking the lead, and by keeping to the "Genchi Genbutsu" principle.
All of us at Toyota will tackle the issue in close cooperation with our dealers, and with our suppliers, together we will do everything in our power to regain the confidence of our customers.
(END VIDEO CLIP)
QUEST: You might be forgiven if by now you are somewhat confused about the number of recalls and the apologies which are not coming quite thick and fast, from Toyota senior executives.
So let's bring you up to date: 400, 000 Toyota drivers are being told to take their cars back to the dealer. Now this has been coming for days, ever since we heard there was a glitch with the brakes on the Toyota's Prius. The Prius, which of course is the company's pride and joy.
But let us look, overall, and give you a totality of what's happening. The recall for the Prius, 437,000. It is a problem with the anti-lock braking system. It is an extremely-it also affects the Scion, the Lexus and a few other models. An extremely complicated system, the gist of which means, when it goes between hybrid electronic and manual, and then from the engine. And then of course, it all becomes rather difficult. Whatever the reason, the software glitch means another substantial recall on top of that which has already happened.
But if it was any other car, but no, it had to be the Prius, didn't it? The car that has won, until now, awards for Toyota. The world's first and best-selling hybrid car. First mass produced hybrid. By any account this was the one car that put Toyota firmly at the top, number one, in the world. And it is this car now that is causing the problems.
Putting it all together, the total recall, cars called back so far, 8.5 million. I promise you, I don't-I'm not going to go into the minutia of which ones go where and which ones and how it all goes on. But the gist of it all is, the sheer number of cars is pretty huge. And that has taken its toll on the share price.
This was the initial drop. This was perhaps a small bit of buy on the rumor, sell on the news. Or the opposite, sell on the rumor, buy on the news. And this is the way it has come back, even further. All of which is somewhat depressing for Toyota, of that, there is to be no doubt.
The slump, and there was a steep decline in the company's reputation. All Toyota really can do now is to promise to fix the fault and say sorry. CNN's Kyung Lah is in Tokyo to hear the latest apology.
KYUNG LAH, CNN INT'L. CORRESPONDENT (voice over): This document made it official. The safety recall is on. Toyota filing papers notifying Japan's government of its recall. The affect models the 2010 Prius and three other hybrids, due to a braking glitch.
Take the right steps to maintain, warned Japan's government.
Hours later, Toyota's top man announced the recall was global. Affecting some 400,000 cars. Akio Toyoda, his grandfather founded the company, made this promise, speaking in English to his customers around the world.
AKIO TOYODA, PRESIDENT, TOYOTA MOTOR: Together we will do everything in our power to regain the confidence of our customers.
LAH: The problem, says Toyota, is with the anti-lock brakes, hit ice or uneven surfaces and the brakes appear to fail for a fraction of a second. Toyota says a software fix corrects the problem in 40 minutes, hooked up to a dealership computer.
For about two weeks, amid Toyota's recall of more than 8 million cars for sticky accelerators and faulty floor mats, the company's president was out of the public eye. Now, he's out in front, saying he's personally tested the Prius and felt the braking problem himself. Toyota says the company is not failure proof. And he was making the Prius recall announcement to send a message to customers in his own words.
"It is about time," says Japan expert Jeffery Kingston.
JEFF KINGSTON, TEMPLE UNIVERSITY: Up until now it has been a total disaster. One can only hope that he'll do better in crisis management from here on. I think that he has shown that he is shaken by events and hopefully he'll be learning from them.
LAH (on camera): While there is a fix for the Prius, there is no fix yet for the other recalled hybrids, the Prius Plug-in, the Lexus HS25H, or the Scion, which all have similar braking problems. Sales have been temporarily suspended until there is a remedy. Kyung Lah, CNN, Tokyo.
QUEST: Toyota's President Akio Toyoda also apologized in an op-ed piece he wrote for "The Washington Post". He writes, "The past few weeks have made it clear that Toyota has not lived up to the high standards we set for ourselves. We have not lived up to the high standards, more importantly, we have not lived up to the high standards you have come to expect from us. I am deeply disappointed by that and I apologize."
Mr. Toyoda went on to say that as president of Toyota he takes personal responsibility.
Colin Hensley joins me now, the general manager of corporate affairs and planning at Toyota Europe.
Colin, firstly, busy time for you. So we do appreciate you taking the time to speak to us tonight.
COLIN HENSLEY, GEN. MANAGER, TOYOTA EUROPE: Thank you, Richard. Pleasure to be here.
QUEST: Colin, I suppose, there is never a good time to have a bad situation get worse. But when it comes to the Prius, this is really-takes it into another league for Toyota.
HENSLEY: That is right. This is really our flagship model so we really believe that we have to do everything that we can to keep our customers happy. We have to regain the trust with the customers. And that is why we decided to make this recall on the Prius, to make this adjustment to the braking system.
QUEST: What people will be asking, and I think the core thing is, consumers can be fairly forgiving, but they do-you know, but they do start to say, is there something systemically wrong at Toyota?
HENSLEY: I can understand the question, of course. And we've been caught by the number of recalls that we've had in the recent weeks. But the bottom line is, as I said already, customer first. So, it doesn't matter when it is, we know we have to do what has to be done to ensure that the problems are fixed. And then after that, we have to regain the customer's trust, and carry on towards the future.
QUEST: People are asking, and I know you are high up the chain, but you are not at the top of the chain. But people are asking, how does a company like Toyota with its global reach, how do you get it so wrong in terms of the PR and getting the message out in the early part of this crisis?
HENSLEY: This was a very difficult series of communications that had to go on. We have obligations to the authorities, as well, that we have to report issues that come up. And those obligations are global in the case of our global vehicles across. But at the same time we have the primary obligation to the customer. So, in this particular instance we decided it was necessary in the case of the accelerator pedal to inform the public, to inform the owners, the customers that there was a problem.
But that meant that we then had to go ahead and identify which vehicles it was, and then identify the right explanation to the authorities. So, in this case the timing was a little bit out of sync, but the primary responsibility, again, was to the owners, to the customers, to let them know what was happening, even at the risk of this appearing that we were a little bit out of control.
QUEST: Yes, I mean, that seems to be the way it has appeared. And, of course, it does come back to this fundamental point. There is now a discrepancy isn't there? Between some Toyota executives who say the company grew too fast, and perhaps that was part of the problem. And some who are saying, well, actually that wasn't really the problem. So where does Toyota stand on this very fast growth, to get-to-number one issue?
HENSLEY: I think we have always said, our aim was never to be number one. Our aim is to number one in the minds and the heart of the customers. And if we achieve that then as a consequence we could be termed number one, globally. No, we have expanded as we have needed to. We have aimed to localize our production where we could in Europe, as we found with this particular issue, in North America. And the company has grown in that way. I think you would have to talk to our executives again to get there sense of the issue.
QUEST: Finally tonight, and I know you and I just talked about it briefly before we came on air. And there is problem of the-allegedly, with the Corolla, in the United States, in the steering. And whether there is a problem or not, time will tell. But are-is Toyota in danger of suffering the man bites dog syndrome, where every problem just becomes, there must be a defect, we had better recall?
HENSLEY: I think we consider every situation individually. We have to do that, because that is our obligation. And if there is an issue with Corolla-and I don't know, honestly, myself. I haven't seen the reports. I've just seen the information coming across the wire. If there is an issue we will deal with that as well, in as timely manner as we can. But, as I said, the first thing is the customer, we need to ensure that we can keep them happy, make them happy, and get them to come back and drive our cars again in the future.
QUEST: Colin, many thanks, indeed. We do appreciate. We know it is busy. We know you have many calls to talk to many people. And we appreciate you talking to CNN QUEST MEANS BUSINESS tonight. Thank you.
Now, later in this particular program, we will be going and delving into some of the issues about modern vehicles. We are going to be talking to a top journalist about, exactly what is it about the complexity? The cars that we may love, have technology that might simply be too good or too fast for its own good.
The news headlines now, Max Foster, is at the CNN London Newsroom.
QUEST: In just a moment, from Brussels to Bratislava, the euro is the currency of more than 300 million Europeans. What its worth is tied up with what goes on in one country and that, of course, is Greece. We take that under advisement, in a moment.
QUEST: Welcome back. Where financial markets are growing increasingly convinced the European Union will be forced to bail out Greece. The expectation is that Athens is going to be offered a way out of its debt crisis. It is prompted the currency traders to give the euro a lift; its best rise against the dollar in nearly a month. The prospect of a Euro Zone country coming to the financial collapse has been undermining. Greece is the most heavily indebted, tarrying (ph) government deficits, you know all the problems. And you also know about the contagion of Spain and Portugal. All of which have made those countries market pariahs.
Let's just look at this. So, you can see the graph it goes, euro versus the dollar. Nice big green map. Those are dates, back in early, and it just literally, this is the way the crisis has developed. This is the bit where, perhaps, there is the scintilla of the bailout which of course is giving some hope. European markets made it two up days in a row, after last week's repeated sell offs. But worries about the sovereign debt crisis were still in the background.
We had strong gains in London, which saw the best in the banking sector. Mines were also rather good. The mines were-Xstrata, saying about dividends, once again. In Frankfurt, Deutsche Bank topped the board. The CAC Currant in Paris was up just a fraction of that.
Now, let's straighten out what we know on the Greek situation and just sort out how much of this is just optimism, by traders, naked optimism?
JIM BOULDEN, CNN INT'L. CORRESPONDENT: Well, we certainly-
QUEST: This is Jim Boulden, by the way.
BOULDEN: Richard, hello.
We started to hear, we started to see unnamed quotes on the wires, some German politicians are starting to say that maybe something will come out of this. And we have this meeting of EU leaders on Thursday, near Brussels. And it seems that everything is coalescing around will some come out of this meeting? Now, unlikely that they are going to make a huge decision on Thursday, but that is where are focusing their mind.
QUEST: I was reading a very interesting piece, funny enough, from "The Financial Times", only yesterday, which suggested that actually, a proper full-scale bailout is not possible under the treaty.
BOULDEN: It is not.
QUEST: Under the Euro Zone treaty, they actually writ-to prevent moral hazard, so what are they going to do?
BOULDEN: They can do a coordinated loan of money from individual governments who are in the EU. Now, I know this sounds like a fudge. But the EU cannot say, here.
QUEST: That is moral hazard.
BOULDEN: But Germany can say, here. France can say, here. Britain can say, here. They would have to go to their taxpayers and tell them why they think this is a good idea, to give Greece money. The theory is that if they did this they would have to have very stringent rules put on Greece. And we know what is happening with that, right? We see people heading into the streets in Greece already. We haven't even had this kind of event happen.
QUEST: But Christine Lagarde said, after the G7, she is the finance minister of France. She said, "We will monitor Greece. We will look at the plan and we will make sure they follow it."
BOULDEN: But, how are they going to pay $31 billion in April and May, which is what they need to come up with, if they have this huge budget deficit? And so-and then all this debt that comes due, and the interest on the debt. Sorry, not the debt but the interest on the debt. How are they going to pay for that if there is any hint that they were going to be in trouble in paying that, the European markets would go crazy.
QUEST: Hang on, we have got to go. We have got to get to it though.
QUEST: The prime minister, the finance minster of Greece, they all say there will be no bailout. And every time anybody writes about this, all we write is there will be no bailout, yet.
BOUDLEN: The word "bailout" I bet you, you'll never hear that come out of a politicians' mouth in Europe. It will be-it could be something else like a loan. It could be something else that helps Greece out. But we are not going to get like an announcement, a huge announcement on Thursday at the EU summit.
QUEST: OK. Not sure we can show that graph again, with -with the-with the-
BOULDEN: With the euro/dollar.
QUEST: The euro/dollar. And if we can, then it begs the question, Jim, what happens? Why should the euro suddenly get that slight pick up, back up again, if that is the way it is going to be?
BOULDEN: We saw euro hitting the nine-month low against the dollar. It has been steadily eroding because of this, ever since we found out late last year-
BOULDEN: That we were going-that Greece had a much worse budget deficit.
QUEST: So this is just -
BOULDEN: This is considered the biggest test that the euro has had in its 11 years of existence, 10 years as a physical currency. This is a real first test. And people have been talking about could it break apart? Could it -
QUEST: Yes, but look at it!
BOULDEN: I'm not saying it will.
QUEST: That is the test, and it seems to be failing the test.
BOULDEN: Yes, but you also have dollar strength as well, as an issue. So you have the two feeding into each other. A lot of people say is this a euro story or is this a dollar story? Here, this last bit, here look from February 7.
BOULDEN: Here is a euro story, absolutely.
QUEST: Yes, yes.
Where is the euro going? I know you are not a currency -
QUEST: All right. Many thanks indeed. Thank you very much, Jim Boulden.
QUEST: And you are going to keep watching over that in the days ahead.
So, to the markets that are open and doing business at the moment. And the market is, once again, over 10,000. Stocks rose on the Greek bailout. It is all about the idea that European leaders will meet to discuss how to manage a growing debt crisis. And that reassured investors. I mean, we are over 10,000 it is easy to work out the percentages, because it just one percent of the market-167, you know where I'm going with that.
When we come back. If you are at home and looking for work chances are you have probably turned to the Internet to find a job, that is. Cyberspace is something of a black hole for jobs at the moment. When we return, Monster says, not too bad, but not good either.
QUEST: Now as you are well aware, on this program we consider the workplace issues particularly, the jobless recovery, amongst the most important things that we actually cover on QUEST MEANS BUSINESS.
If you are out of work and looking for a job the frontline apparently is still online. It is tough out there. These are the latest numbers for the European employment market from the online recruitment agency Monster.
Now, there are two sets of numbers that Monster came up with. The first is month-on-month, December to January. The second, of course, is year-on- year. Year-on-year, you can pretty much forget about. It is a torrid tale of misery. For example, year-on-year, look at that, in January online job openings were down 12 percent, year on year. January is traditionally the hardest month of the year at tourism, hospitality, all these industries, all slow down. What is interesting is this year-on-year drop is abating to some extent. We are still losing jobs faster than we are creating them, but it is not as bad.
In Germany it is one of the worst affected. Because as the online recruitment remains low, the government has encouraged companies to avoid layoffs. But if you avoid layoffs then obviously when the return comes then you are slow to employ again. The seasonal affect can't be over stated. Tourism is off, hospitality is off. Some industries, like HR, legal, some of the industries are doing better. But it is incremental and it is very small.
So, to discuss this further, I spoke to Andrea Bertone, the head of Monster in Europe. If the down turn is still so strong, at this point, should we be concerned?
ANDREA BERTONE, MONSTER, EUROPE: No, it is actually down because of seasonality. January is traditionally very slow on online recruitment. It is down but much less than last year. And it is confirming a positive trend over the last five months. Companies are starting to create more jobs, compared to six months or nine months ago.
QUEST: They are creating more jobs, but they are not creating them as fast as we are continuing to lose them?
BERTONE: Yes. And this is because the recession is being tremendously severe. We lost millions of jobs. And companies are still concerned in controlling their payroll and their costs. But at the same time, they are seeing the opportunity of the recovery and they want to start to recruit ahead of that.
QUEST: Is there a difference between the jobs that are being lost and the smaller number of jobs that are being created?
BERTONE: Yes, I would say that small and medium businesses are driving the growth, because they are more agile, more flexible, and they can quickly recognize (ph) the recovery. We are seeing certain sectors, in HR, in marketing and PR, companies are starting to prepare for growth and they are hiring more.
QUEST: So, where are we losing? Why are we continuing to lose jobs even after the recession is over?
BERTONE: We are continuing to lose jobs in sectors like plant workers, and technical engineering, where it is going to take longer for the recovery to take place. And also, geographically, we can see the U.K., the Euro area (ph), is flat now. So over the next months we will probably cross into positive. Spain, Italy, Germany, they are still quite negative, down euro area (ph).
QUEST: How damaging is it to the job situation is this latest crisis in Greece, Portugal, and Spain?
BERTONE: It is difficult to say, because it is more like the real economy, behind those countries. The unemployment rate has reached record highs in some of these countries. Obviously, the financial crisis is not helping the situation. And it is going to make the recovery much further away.
QUEST: When we talk of Spain, we know it has an unemployment rate of 18 or 19 percent; 44 percent of the people are of a young age.
QUEST: Is that a real number of unemployed? Or is that just because of the way the numbers are counted?
BERTONE: Ah, the 18 to 20 percent is probably a real unemployment, right? Then you never know what is not counted, that is on the black market. That, you know, in countries like Italy, for example. In the south of Italy, you know, the unemployment is probably much higher, the real unemployment.
QUEST: As I look at your index, it is one of these classic points in the recovery, where I'm not sure whether I should be pleased or not? Whether it is good news or not?
BERTONE: Yes, the trends are positive. And we are still not out of the woods. We are still fighting with some good news and some bad news. So, you need to look at the long-term frame, in the second half of the year we are going to see some positive growth.
QUEST: Well, so, factor that into our traffic lights, please.
QUEST: On the one end you have got the trend, on the other hand you've got the, "We are still losing jobs." You can have a red or an amber, or a green for the jobs in 2010. Which is it to be?
BERTONE: I will have amber.
QUEST: Oh, you are going for the safe on the end.
BERTONE: I'm going for the cautious optimism.
QUEST: Cautious optimism.
BERTONE: Thank you very much.
QUEST: Many thanks, indeed.
QUEST: We are getting a lot of ambers, which seems to be either, we are at that point of the economy where things are turning around, or people are just playing safe.
It seemed like a good business plan, take the world's number one hybrid car, get people to pay to ride in it. Toyota's latest troubles might have left one car hire company, in the soup.
We are getting down the nuts and bolts of this story in a moment.
QUEST: Good evening. I'm Richard Quest, QUEST MEANS BUSINESS. This is CNN.
Our top story, the spiraling crisis at the world's biggest carmaker. Toyota has recalled about 430,000 cars worldwide, mostly of their star Prius hybrids. It brings the number of cars recalled for repair to almost eight-and-a-half million since October of last year.
The latest problem concerns the brake system. Toyota is already working to fix faults with accelerators on millions of other vehicles. Even before the newest announcement, Toyota said it was looking at a bill of $2 billion in repair costs and lost sales.
The president of Toyota made a second public apology, trying to undo some of the damage to the company's reputation.
AKIO TOYODA, PRESIDENT, TOYOTA MOTOR: Let me assure everyone that we will redouble our commitment to quality as the lifeline of our company, with myself taking the lead and by keeping to the (INAUDIBLE) principles. All of us at Toyota will tackled the issue in close cooperation with our dealers and with the suppliers. Together, we will do everything in our power to regain the confidence of our cum -- customers.
(END VIDEO CLIP)
QUEST: In the last couple of hours, one of the car sharing companies, Zipcar, has announced in the United States that it is withdrawing the Prius from its vehicle register -- at least until it's been -- the problems have been sorted out. That's another blow for Toyota. Well, Toyota's trust in the car's reliability has always been a key selling point. When it brought out the Prius, it built on that, adding some green appeal due to the hybrid's low emissions. Some car companies seized on that for hiring and rental purposes.
CNN's Atika Shubert caught up with the boss of one company that operates the Prius and needed to find out how things are going on.
ATIKA SHUBERT, CNN CORRESPONDENT (voice-over): Green Tomato Cars sells itself as the most environmentally friendly car hire in London -- exclusively using the Toyota Prius, logging six million miles in the four years it's been in business. With more than 100 Priuses, managing director, Johnny Goldstone, says Green Tomato Cars have been impacted, but he remains surprisingly optimistic.
JOHNNY GOLDSTONE, GREEN TOMATO CARS: I think the biggest challenge for us in terms of the recall actually is just reassuring customers that there isn't a safety issue here. I think because of some of the press coverage, people may think that there is. But like I say, our own experience with the car and our communications with customers is that it's a minor technical issue and -- and if we thought there was a safety issue, we would not be running the cars. But we're very confident.
SHUBERT: (on camera): Are you considering other options now that there are other hybrid vehicles out there?
GOLDSTONE: Our commitment is to using the greenest car that works as a taxi. And for a long time, that's been the Toyota. We've tried other models since the Toyota has been out but have felt that they've fallen far behind in terms of performance or logistics or whatever it may be.
So the question then becomes is our confidence in Toyota dimmed at all by what's happened?
And the answer is no.
SHUBERT: Are people now sort of putting the environment factor to the side and saying, you know what, I'm more concerned than I am environment?
Or do you find that's still a big concern for them?
GOLDSTONE: I'm very hopeful that this recall draws a line under the issue and that customers again are confident in traveling in Toyotas and other environmentally friendly vehicles, because you've got to make these sorts of companies who are -- who are really putting their necks on the line and are making things happen in -- in terms of improving the chances against climate change.
SHUBERT: (voice-over): In fact, Goldstone insists there is a silver lining. With so much media coverage, Londoners finally know what those silver cars with the green tomatoes are all about.
Atika Shubert, CNN, London.
(END VIDEO TAPE)
QUEST: This is the car that all the fuss is taking -- is all about. It is the Prius car.
And with me is Chris Harris, a motoring journalist, to explain exactly the sort of problems.
Have we made a car that is simply too difficult to actually be used and to be put on the road properly?
CHRIS HARRIS, MOTORING JOURNALIST: No, I don't think so at all. I mean the -- the problem with the Prius is -- is actually quite simple. What's happened is you've got a lot of systems going on. You've got an electric motor, an internal combustion engine and they work together. And at times when the engine is running, it has to charge the battery so that (INAUDIBLE).
Now, that involves regenerative braking. So the braking system charges the batteries. And what Toyota says is that when you're braking hard with the ABS on, that's upsetting the brakes and -- and the pedal is (INAUDIBLE).
QUEST: Yes. Ah, but there is so much electronics, there are so many bits and bobs in all of this car, one starts to wonder, is it simply too clever for -- for its own good?
Are cars changing?
HARRIS: I think they are. And I think that there is a wider issue here and that is probably surrounding obsolescence in motor vehicles because, you know, your laptop, you only expect that to last 10 years. You don't expect your iPod to last 10 years.
So why should the electronic boxes in your car last 10 years?
So we -- are we reaching a stage where we have to life the components in the car that are doing the thinking?
QUEST: Purely by luck over here, how old do you think that car is?
HARRIS: Well, that's a wonderful Mercedes 190K. It's a 1992. That will go on to do probably 200,000, 300,000 miles more (INAUDIBLE)...
QUEST: But how old is it?
HARRIS: It's a 1992.
QUEST: A 1992, right.
QUEST: So that's a good 17 or 18 years old.
QUEST: Will this last that long?
HARRIS: I -- I'm not so sure or -- or how will it -- how expensive would it be to repair when that black box goes wrong, when it's 10 years old?
It will be a write-off, surely.
QUEST: But surely you're not asking us to put the clock back and become more antiquated in these matters?
HARRIS: No, I'm not. But I think they probably need to look at cars' lifetime more sensibly, particularly with regards to the electronic boxes. I don't think they're any less safe. I think they're a great advantage for electronics. I think we need that.
But do they last 20 odd years, these boxes?
QUEST: OK, Chris, now, let's -- we probably accept -- all of us agree that the -- whatever problems there are with the Prius are few and far between and it's 99.9 percent safe.
HARRIS: Absolutely. I mean this -- there's a...
QUEST: So we're really -- so you and I are really talking about an economic question and a technical question, an engineering question and a commercial question?
HARRIS: Absolutely. I think that's the key thing.
Are cars going to become a white good, effectively?
Are they going to be something that's disposable after a five, seven year use period?
QUEST: Yes, but my fridge -- my fridge costs 150 pounds, $200 or $300. This costs tens of thousands.
HARRIS: It does. It's an interesting question, isn't it?
QUEST: What do you think?
Are we moving to the era of the disposable vehicle?
HARRIS: I think we might well be looking at that with some electronic systems. And it will be interesting to see how the insurance industry is going to deal with this, as well, because what happens if you make a claim on a 10-year-old car?
It's worth 5,000 pounds. And your black box isn't manufactured in great numbers anymore, so it's going to cost you 5,000 pounds to buy that black box. It's a technical write-off, isn't it?
QUEST: All right, Chris, many thanks, indeed.
And look at this -- so -- there we are.
When we come back later -- I'll be back in the studio in just a moment.
But I shall return to the Prius for a Profitable Moment.
QUEST MEANS BUSINESS has plenty more between now and then.
QUEST: Welcome back.
Right now, right here in London, we're in the middle of One Young World Summit. One Young World Summit is dubbed as the junior Davos. This was the opening ceremony streamed live on the Net last night. The feel is very different from the World Economic Forum in Switzerland last month -- well, mainly because everybody there seems to be about a fraction of the age of the old codgers who were in Davos, like myself.
To get people talking about issues, including economic ones and the search for solutions. Most of the delegates are under 25. They come from all over the world.
Lauren Bush is chairman of the FEED Foundation and joins me now -- and a niece of the former president -- President Bush.
Well, and, Lauren, what's -- the issues that the conference deals with is the improvement, obviously -- and on putting things and doing things right in the future?
LAUREN BUSH, THE FEED FOUNDATION: Yes.
QUEST: You'd agree with me on that?
QUEST: So with that in mind, where do you think you can make the most contribution?
BUSH: I believe personally that it really is up to everyone to find their own unique passions and interests and intelligence and do what they can. So for me personally, I started a company called FEED. And we sell these bags...
QUEST: And wait, wait.
BUSH: We have a prop.
QUEST: I won't -- I won't look into it.
BUSH: Oh, it's fine. It's fine.
QUEST: In case it's got something in it.
BUSH: So each bag sold, this bag in particular, feeds a child in school for a year.
BUSH: So it's my way -- I love design, I love fashion. This was my way of sort of giving back to the world through the U.N. World Food Program. And for every bag sold, you know, as a consumer, that you're feeding a child for a year.
QUEST: This is fascinating and only last week, I was chatting with Queen Rania of -- of Jordan on these sort of issues.
Is there not a difference, though, between having the good intentions and seeing the results and being able to affect the results?
And I sometimes wonder, with youngsters...
QUEST: Which you'd be...
QUEST: I know it's not terribly (INAUDIBLE)...
BUSH: No, I'm proud to be a youngster.
QUEST: Well, but it -- you know, do you all sometimes appreciate the difficulties to actually create and improve?
BUSH: In -- in going through the process of starting a sort of social business, I do now really appreciate the process of actually being a change agent and going through and -- and actually doing something. Because it is, you know, we all get together. We can talk about things.
Who knows what will actually come from that?
But even if a few people are inspired to start or take their ideas to the next level and really change the world or help the world in some way, I think that's the hope of One Young World and the hope of what we're all here on Earth to do.
QUEST: Well, yes. You see and I mean one has to mention, of course, you know, one looks at relatives, perhaps, of yours and relatives of mine - - who knows?
I mean, the previous generation got us into the mess in the first place, in many ways.
Do you see yourself as having to dig yourselves out of it?
BUSH: No, I don't -- I don't look at it that way. I think that's kind of a negative -- you can sit here and blame this person and that person for everything.
QUEST: But it's fun.
BUSH: But it's fun.
QUEST: It's fun.
BUSH: But it's an easy -- it's an easy way out, in my opinion.
BUSH: And I think it's up to us to just say this isn't the way we want to do things, if it's not, and change what we feel needs to be changed.
QUEST: All right, Lauren. But then how do you -- how do you prevent naked idealism...
QUEST: -- tinged with real pragmatism?
QUEST: I understand how you've done it with this. This is real -- how much are you selling these for, by the way?
BUSH: It feeds a child in school for a whole year.
BUSH: Only $60.
QUEST: $60. Put me down for one.
QUEST: My wallet is on my desk.
BUSH: I'll send you one. OK, good.
QUEST: My wallet is on my desk. You can -- you can have a go at that.
BUSH: OK. Excellent.
QUEST: Have you learned anything from the conference?
BUSH: Yes, I mean it's only been one day so far...
QUEST: What's been the most exciting thing that -- besides being exposed, if you like, to the ideas?
What's it -- what have you found the most invigorating?
BUSH: I think the most invigorating is just the spirit of all these young people coming together, really -- maybe idealistic but wanting to do something. We want to engage in the world in the right ways. And that personally, today, I got to see Mohammed Eunice speak...
BUSH: So he's one of my heroes. And that was...
QUEST: I believe it.
BUSH: And that was a real treat, so.
QUEST: Listen, I'm not going to ask you your age. It's a -- it's rude to ask anybody's age, but I -- I assume you're on the wrong -- or the other -- the right side of 30.
QUEST: And so if you can't be idealistic at your age, I promise you, by the time you get to my age, you're really (INAUDIBLE).
Many thanks, indeed.
BUSH: Thank you.
QUEST: Thank you so much for coming to see me.
BUSH: Thank you so much for having me.
QUEST: Thank you very much.
Now, all right, I was warned. I was told. Guillermo said that the weather in Budapest...
GUILLERMO ARDUINO, CNN METEOROLOGIST: Yes?
QUEST: -- would be snowing and unpleasant. And I still packed all the wrong clothes.
QUEST: So it's just -- I did. I did. It was a disaster. Don't even -- don't go there, Guillermo.
But I know that in Washington, Baltimore and large parts of the Northeast in the U.S., things are pretty grim there, as well?
ARDUINO: Yes. Let's show, actually, a shot from Washington to have an idea what's going on. You see it's not so much falling right now, but we have that lingering from the previous storm and we are going to get some more.
Also, you're not out of the woods, because I'm going to ask you, Richard, about that Budapest story in a second.
Well, see Chicago -- I was looking at the airports over here, where we see the delays right now. And we are going to see more, especially if you are coming to the States in the next two days, starting now, we are getting the snow in some areas.
I was checking out Baltimore, already snowing. And in the last hour, it wasn't. Then we're going to get some more snow, of course, in Chicago. And we are going to get the snow in Washington.
But how much?
Well, it's all because of this low pressure center and the moisture that we have in the area. Also, it's widespread, all the way to New York, up to 50 centimeters.
Let me take you now to specifics and -- well, you know what?
A couple of days ago, or on Friday, I said specifics were 34 centimeters in Washington. So it's going to be in between 20 and 50 centimeters.
Let's see airport delays, Chicago, that's for Wednesday, all right?
That's for tomorrow. Chicago; Atlanta, a little breezy. I'm going to Spain tomorrow and I hope I don't get delayed. The West with such bad weather.
Now, let's see, this new system is going to bring the snow into the Balkan Peninsula here. We're going to see areas like Serbia, Montenegro, Croatia, Bosnia, Slovenia up here with a lot of snow.
Northern Albania, down there; also, Western Macedonia here and South Central Romania here, the Carpathian Mountains, we will see a lot of snow, probably more than half a meter. And already we're going to see a lot in Austria.
You see overall, London, also, possibly some. North of Dover, we will see snow showers.
That's the forecast, in fact.
Can I ask Richard if he got snow on Saturday at all in Budapest?
Can I ask you?
I -- I -- I do beg your pardon. I'm so sorry. I was -- I was thinking about my Profitable Moment.
My Budapest -- you're asking me about Budapest, aren't you?
Where -- was it snowy on Saturday or not?
QUEST: Oh, now, Guillermo, it wasn't just snowing on Saturday. I mean this was just like, you know, whoosh, whoosh, whoosh. And I went with just a pair of sneakers and a light sweater. And I mean it was just -- I mean I -- and you warned me.
ARDUINO: Well, good.
QUEST: I've nobody to blame but myself.
ARDUINO: Good. Excellent. Well, Richard, good thing that you're not going -- going back there, because it's going to snow there a little bit more now.
Now, Paris is going to get some more snow. Lyon, interestingly enough, in 15 -- in a half an hour or so, 45 minutes, we have Fionnuala Sweeney in Lyon. And she's not seeing snow but sleet. And at the airport, we see snow in Lyon.
Barcelona, windy conditions; and Rome, also, the winds will be there.
Well, stay with us.
We'll have Profitable Moments, as Richard was saying, after the break.
QUEST: India's most valuable company is denying it's made a bid for one of the most famous names in English football. "The London Times" says Mukesh Ambani, the chairman of Reliance Industries, is seeking a controlling stake in Liverpool FC in return for clearing its debts of more than $350 million.
The paper even said a similar competing proposal had come from another Indian tycoon, Subrata Roy of the Sahara Group. Reliance's spokesman wasn't having anything of it: "We strongly deny this report."
Subrata Roy's spokesman wouldn't comment.
So we've got a strongly denied and a no comment.
Now, with no funds available, Liverpool's current owners, the Americans, Tom Hicks and George Gillett, are under intense pressure from supporters to sell. The financial state of Liverpool and several other English clubs makes for worrying reading, along with American football's NFL, the brand (INAUDIBLE) is supposedly one of the world's richest professional leagues.
As CNN's Joe Carter explains, however, there is a marked difference between the way clubs are run on either side of the Atlantic.
JOE CARTER, CNN CORRESPONDENT: Here in Miami, the NFL just wrapped up another successful football season. And like the English Premier League in Europe, the NFL is the richest sports league in America.
(voice-over): TV contracts, sold out stadiums and merchandise sales make both leagues multi-billion dollar industries. But despite those billions, the EPL has several clubs which are struggling financially -- an issue the NFL doesn't have to deal with.
RICK HORROW, SPORTS ANALYST: The biggest factor that guarantees profitability with the NFL -- some would call it socialism, but it's really sharing of television revenue. The Green Bay Packers get the same amount of national television revenue as the New York Giants do, even though their town is one one hundredth the size. But they also get 40 percent of the ticket revenue of any game. The home team keeps 60, the visiting team keeps 40 percent.
So it's tickets, it's television, it's also league-wide merchandise. So the big time sponsorship deals that are done are shared equally among the member teams.
DANIEL KAPLAN, SPORTS BUSINESS JOURNALIST: The NFL has a salary cap and it has a salary floor. Each team has to pay at least a certain amount of money to its players. This year, it's about $100 million. And they can go as high as $128 million.
In the Premier League, there's no salary floor, there's no salary cap. And so teams can spend as much or as little as they want. And that's what's led to the disparity in performance on the pitch. You have three or four teams who always make the top three or four in the Premier League and there's those teams that are always in the middle of the pack. You don't have that in the NFL.
ROGER GOODELL, NFL COMMISSIONER: I think some of the fundamental policies we have in the NFL -- as you point out, revenue sharing -- give everybody in the NFL the financial foundation to compete with the other 32 teams. And I think that's been one of the core of our successes.
CARTER: The NFL has another advantage -- state-of-the-art stadiums that produce huge amounts of revenue for their teams. Over the past 15 years, more than half of the 32 teams in the NFL have built new stadiums, with another one set to open in September.
HORROW: It's not just a nicer field and nicer turf. It's twice as many sky boxes and club seats. It's an opportunity for the naming deals, naming deals around in North America are now going for as much as $20 million a year.
KAPLAN: The issue you do have in the Premier League that you don't have in the NFL and must be noted is relegation and promotion. And that -- that creates a -- a sort of an unpredictability. And if you're trying to finance a stadium, it's hard to go to lenders and say we want 200 million pounds when you might get relegated to a league where the revenues aren't as rich.
CARTER: So the question is what business practices from the NFL can the EPL implement?
KAPLAN: When I asked them, why don't you do a salary cap, why don't you do what the NFL does and have a more regulatory approach to who can own the teams, you know, how much debt each team can carry, they sort of smirked at me. They laughed at me. And they said, oh, you Americans. We don't run our sports that way.
Well, now the shoe is on the other foot. The Premier League is over leveraged. They've got owners they wish they didn't have. And now you may see more of an NFL-like approach come to the Premier League over time.
HORROW: If you were to go back in an existing league -- it doesn't matter if it's Premiership, Cricket, anything -- and say, by the way, let's redo the system, let's take money away from the big guys like Man U and others that have the big contracts and let's redistribute, it really doesn't work very well.
So the have and the have not gulf in many sports is the single biggest anchor dragging down the weakest teams. And it's like anything else in business, you're no stronger than your weakest link. So when a team goes bankrupt, it reflects badly on any league, whether it's the Premiership, the NFL or otherwise.
QUEST (on camera): In April of 2009, "Forbes" valued Manchester United at $1.87 billion -- the highest figure of any team in any sport. And while Man U and two other teams in the EPL are valued at more than a billion dollars, 19 teams in the NFL are at that level.
Joe Carter, CNN, Miami.
(END VIDEO TAPE)
QUEST: So, let's bring you up to date with the markets, because having had such very sharp falls in recent weeks, you'll want to know that today is a rollickingly strong session. And it's all because of the prospect of a bailout again -- for Greece. There's possibly, just a scintilla of the subsiding of the European sovereign debt crisis. I suspect it's not going to last for much longer.
But we are now over 100 -- 10000 on the Dow. It's up 1.57 -- 1.59 percent. And at least there seems to be a little bit more of a relaxed atmosphere this Tuesday than perhaps we've seen in recent days.
You're up to date with how the markets go.
I'll have the Profitable Moment in just a moment.
QUEST: Tonight's Profitable Moment from the seat of the Prius. The car the star car that is, of course, now, the latest headache for Toyota. With more than 450,000 being recalled, the car that put the shine on Toyota has now turned it well and truly tarnished.
I have only ever owned three cars in my life. There was Oliver the Escort, so-called because it kept asking for more. There was HMS Quest, an American car so big, you could land a helicopter on the hood.
And then there was Bessie the Jag. Bessie, a vintage car of sorts -- 14 years old. But nothing ever went wrong. There was nothing to go wrong -- a simple vehicle in mind, body and spirit.
Look at this -- more things than you can look at or shake a stick at. It vibrates, it hums, it whizzes. And this, of course, is the future.
And that is QUEST MEANS BUSINESS for this Tuesday.
I'm Richard Quest in the Prius.
Whatever you're up to in the hours ahead, I hope it's profitable.
"AMANPOUR" is after the headlines from the I Desk.