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QUEST MEANS BUSINESS
Windows 8 Launched; Little Movement in US Markets; AutoNation Accelerates; Businesses Cut Back in Europe; Olympic Boost for UK; European Markets Mixed; Pound Up; Outlook Monaco: Growing Business Born in Monaco
Aired October 25, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Tonight, raising the curtain on Windows 8. The chief executives of Microsoft and Dell on this program.
Less gloom. More gloom. Britain's out of recession.
And in the US, AutoNation's chief executive tonight, on the program, will tell us the car industry's revving up speed.
I'm Richard Quest, live from the CNN Center where, of course, I mean business.
Good evening. It is Microsoft's biggest gamble in almost 20 years. Windows 8 has been launched to the public, and in everything from the way it looks to the software it runs, the most radical redesign in the company's history, as you can tell. No more little icons; big tiles instead.
The new platform's been developed to fit both PCs and tablets. At the launch in New York, Microsoft's chief exec, Steve Ballmer, said users would learn to love the new changes.
(BEGIN VIDEO CLIP)
STEVE BALLMER, CEO, MICROSOFT: All of these form factors will transform what you know and experience today into something quite new and quite wonderful. These are the thinnest, the lightest, and the fastest PCs ever created.
(END VIDEO CLIP)
QUEST: Steve Ballmer announcing it. Maggie Lake, who is in New York, has been speaking to the chief exec of both Dell and Microsoft. Maggie is with me now. What did you make of it?
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Yes, Richard, interesting to get these two together. They are pioneers in the tech industry, and industry that is rapidly changing. Let's just underscore the gamble, here. Windows operating system, $18 billion in sales, $11 billion in profit. To radically change it is a very big gamble, indeed.
But clearly, Microsoft sees the rise of the tablet computer, the way that it is changing this industry. So, I talked to both Steve Ballmer of Microsoft, the CEO, and founder and CEO of Dell, Michael Dell, about both the user experience for Windows 8 and, importantly, what's happening to PCs themselves. Are they in jeopardy? Have a listen to what they told me.
BALLMER: This is the new Windows 8. It -- Windows 8 start screen, all of my life and my information, I can flip through applications --
LAKE: But not all of --
LAKE: -- you can't do all of the computing in that, right? Is it sort of --
BALLMER: Word, Excel, Power Point, sure. I'll bring up an application. Here's the Windows Essentials application, running on what we know to be the desktop. But then, I can just bring back any other application, and there it is, the sports application alive with information. And Michael, maybe you show people how they can use this really?
MICHAEL DELL, CEO, DELL: Yes, so this is just like your notebook, of course, and you can go to the desktop, as Steve showed. And then, of course, one of the interesting things about this product is that we can flip this around, and then it becomes a tablet.
LAKE: And -- this is a different launch. Not only is it going to look radically different, but for the first time, Microsoft's also competing on a hardware basis with the tablets that you have out. How does that change things for Dell? What does that mean for Dell?
DELL: We've never made all the PCs in the world. We think we make the best PCs in the world, and we're really excited about this PCs, and certainly, we're very focused on our commercial customers, where Dell has a very strong presence.
I think what Microsoft is doing is the things that are important to allow Windows 8 to succeed and to allow the Windows ecosystem to succeed, and that's ultimately good for customers, it's good for Dell.
LAKE: Just as we launched this, there are magazine covers saying the PC is dead. Do you think the PC is dead?
DELL: Well, look. This year, there'll be about 400 million PCs sold. I remember hearing that when there were 100 million PCs sold a year --
DELL: -- so, they've been doing this for a while. That's been going -- there's been discussion of that for a long time, but there seem to be more and more PCs being sold.
There are about a billion and a half PCs in the world, and so if you go out in the real world and look at how business is done, how people get productive work done, you see a lot of PCs. Not to say there's not a role for SmartPhones and tablets.
What's really interesting, of course, about this announcement is now we have tablets that are also full PCs.
LAKE: Right. And this clearly is geared -- this overhaul is geared to work across that, right? Steve, what is your response to this? Is the PC dead?
BALLMER: I'd say the PCs never been dead, it never will die, it rebirths, it reimagines, it moves on. We started with desktops, for gosh sakes. And then, voom! PC gets reimagined into big lugables. And then laptops, and then light notebooks, and then ultrabooks.
And now, we have PCs as tablets. And the number of form factors just from Dell -- Michael and I showed you one of these that is a notebook that flips, but you can take the top off, you can undock, you can carry something that is thin and super light.
We have PCs coming with Windows 8 that are wall-sized or -- and certainly, if you look at the new Dell, 27-inch. They're these rich, immersive TV experiences.
Our job -- our job -- is to make sure that not only is PC not dead, but we're constantly innovating it, reimagining it. And the PC as tablet - - voom! We're the only people who've got that, a machine that you can use for play that can be your PC and be your tablet. We don't make you make some compromise on that through the work we're doing together.
LAKE: Vintage Steve Ballmer, there, Richard, as you can see, getting all fired up. Listen, this is in anticipation also of the release of the Surface tablet, and that's what I was asking Michael Dell, they are now competing, Microsoft, with their own hardware.
It is going to be a little different, that Windows 8 experience, whether you're on a computer or a tablet. He kind of moved past that quickly. We go into it more on the web.
LAKE: But clearly, this is a different landscape they're trying to capture here at a very big gamble, Richard.
QUEST: And it is way too soon, Maggie, to say whether it's a success, whether it's going to be a success, and how this will change the empire. But Maggie Lake, who is in New York for us tonight.
The immediate reaction from investors has been muted. Microsoft shares have been flatlining all day, and then it just started to get going. Analysts are predicting a sluggish start to Windows 8 sales, which is why - - they explain why the share price has fallen more than 5 percent in the past week.
The broader market is also struggling. Microsoft is trading on both the Dow and the NASDAQ, and both indices are see-sawing, just very small movements, as you can see, at the moment.
Corporate results have been a mixed bag. One piece of good news was first-time claims for unemployment benefits fell -- falling to 369,000. A better than expected range.
Now, if you join me over at the CNN super screen, you will see this map. It is AutoNation dealerships. America's biggest auto retailer says sales are strong and the future looks bright. AutoNation is reporting third quarter net income, it's $81.6 million, it's up 15 percent from the year before.
And this dealership dominates the United States, 260-odd, as you can see, right the way across the United States, around 20,000 employees. The chief executive, Mike Jackson, says the sector will continue to remain a bright spot in the US economy for at least several years, and he joins me now.
It is fascinating the results, because I'm not -- if I'd had to put money on it in a sluggish economy, I would say changing cars -- automobiles is the last thing people are thinking about. So tell me, what's your experience and why?
MIKE JACKSON, CEO, AUTONATION: Well, Richard, I think in -- on a common sense basis, you're absolutely right. But what happened here in America in 08 and 09, we didn't have a recession in automotives, we had a depression in automotives. Sales volumes fell from an industry average of 17 million --
JACKSON: -- down to below 10 million with the withdrawal of credit available for our customers. And so, what happened is people stopped buying cars for several years, almost completely, and it pushed out the average age -- the average age of a car in America to 11 years old.
And during that period of time, they stopped maintaining the car. So now, they absolutely have to do something on a replacement basis.
QUEST: So, they are replacing cars --
JACKSON: So you can --
QUEST: Yes, OK. They're replacing cars. But are they trading down? Are you having to give greater discounts? Are you basically having to shove them out the door to keep numbers up?
JACKSON: Well, this is the most interesting this it that the industry is the most rational and profitable I've ever seen it in my career, and I've been in this business 40 years.
Because during the crash of 08 and 09, we did do a major restructuring, and tremendous capacity was taken out, so as the volume comes back in, the auto industry in the United States is very profitable at the manufacturer, supplier, and the retail level.
QUEST: All right.
JACKSON: And everybody is behaving rationally. Nobody's doing anything crazy with incentives. So, it is a bright spot in the US economy.
QUEST: It's a -- well, well -- bright spot. You know me, Mike, is that I always see the cloud on the horizon. So, we've got an election coming up. What -- whoever wins, what do you want from the next president of the United States?
JACKSON: Well, while the auto industry is a bright spot, the overall US economy is very challenged, as you know, Richard. Growth has fallen to expected GDP growth, 1.5 percent this year. And that's with massive stimulus from the Federal Reserve.
And fiscal spending, deficit spending, of over a trillion a year for the last four years, unsustainable stimulus coming in to this economy. So, structurally, this economy has to be fixed. And the overhangs are the fiscal deficit, we need tax reform, we need entitlement reform, we need prudent regulation.
And America has gotten a gift with this new drilling technique of fracking that has given us an entire new opportunity and energy, which we need to seize in order to get this economy moving again. So, Washington needs to show it can govern in a mature way, address these issues, and get out of the way and let American entrepreneurialism take over, and this economy will grow again.
QUEST: And I need to ask you, just in case you wish to declare a partisan advantage, one way or the other, in the absolute openness of transparency, do you wish to show your colors?
JACKSON: Yes, I do. I think the president has had his chance for four years to tackle these big issues on the economy, and he's not.
QUEST: All right.
JACKSON: So therefore, I say, hey, you had your chance to create a recovery. It's not working. I'm putting my faith and confidence in Governor Romney.
QUEST: We'll talk more about the more -- less politically sensitive issues in the months ahead. Mike, always good to see you. Thank you for joining us and making sense on --
JACKSON: Good to see you.
QUEST: -- cars and --
JACKSON: My pleasure.
QUEST: And of course, just to make it clear, when we do have a CEO like that who does come down one side or the other, balance is something you find over time, not in any one particular program in any one particular moment. That, of course, Mike Jackson is for Governor Romney. In the days ahead, you'll hear those who are for President Obama.
Ford is ending a century of vehicle production in the United Kingdom. The carmaker is to shut down two plants, cutting around 1400 jobs, a tenth of its UK workforce. It's also cutting a plant in Genk in Germany, slashing 4,000 jobs there.
Now, it's expected a full-year loss of more than $1.5 billion, and it is the European business that is causing the problems. One of those plants is in Dagenham, by the way, in Southern England.
WPP, Martin Sorrell's company, is also feeling the slowdown in the eurozone. It's the world's largest advertising group, revised down full- year forecast for the second time in as many months, expecting growth of between 2 and 1.5 -- sorry, 2 and 3 percent. The chief executive, Sir Martin, says weakness in Europe partly to blame.
(BEGIN VIDEO CLIP)
MARTIN SORRELL, CEO, WPP: If you look at our business, Asia, Latin America, Africa, and the Middle East and the UK continue to do quite well. The issues for us in the US, which has slowed, and indeed Europe as a whole, even central and Eastern Europe has slowed, with the exception of the UK and, to some extent, Germany.
(END VIDEO CLIP)
QUEST: All right. Coming up in a moment, Britain bounces back. The treasurer claims the economy is healing, but is there a chance of a relapse? It's QUEST MEANS BUSINESS.
QUEST: Good evening.
QUEST: Britain's double-dip recession is over, and it's thanks largely to the Olympics. Look at the numbers, and it tells the whole story. After shrinking for nine straight months, the UK economy grew by one percent in Q3. Olympic ticket sales accounted for 0.2 percent of that. Even with the expected Olympic boost taken into account, the figure was much better than economists had forecast.
Look at those. So, you have the down quarters, and then you have this very sharp rise, much more than people had been expecting. Most were to bring an increase of just 0.6 of a percent.
The question is really crucial: can we say that those numbers were one-offs? Jim Boulden is keeping the seat warm for me in CNN London.
QUEST: Don't touch the bell! Actually, it's --
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I'm looking for the bell.
QUEST: You can't. It's -- the bell's here with me. You know the phrase, have bell, will travel. Jim Boulden, is it a one-off or is this a series?
BOULDEN: Well, first we should notice that it is a -- the preliminary number in the UK, I think, is kind of notorious for downgrading numbers afterwards, so we take it with a pinch of salt. Yes, it was much better than people expected, yes you have that -- the numbers because of the sales of not only Olympic tickets but Paralympic tickets, which were fantastic here during that quarter.
Also, you compare it to the quarter before, and the queen's jubilee, there was an extra bank holiday. In other words, an extra day where people didn't go to work. And so, you compare that two, and it made that number look even better.
And Richard, I talked earlier to the economic secretary to the treasury, Sajid Javid, and I asked him if he is cost -- sorry, cautiously optimistic like the rest of us are about this number. This is what he had to say.
SAJID JAVID, BRITISH ECONOMIC SECRETARY TO THE TREASURY: You're right to suggest that we should remain cautions, and one of those reasons is particularly because of the Olympics. The ONS, the entity that puts together these numbers, they themselves have suggested that of the one percent growth, quarter-on-quarter growth, that about 0.2 percent of that is related to the Olympics.
Even once you take that away, you still have a significant growth number. But we want to stay cautious. I think it's right to do so. But it's just another piece of very good economic news. After a raft of such news, I think that will help to build confidence in the economy, and that's what we need.
BOULDEN: The construction numbers weren't very good. In fact, down for the quarter as well. Do you see that as seasonal, or is just that it's filtering through after double-dip recession?
JAVID: Well, there's a bit of filtering through, but if you dissect the numbers, you're right to say construction, I wished it was a bit stronger, but manufacturing numbers were good, production services was good.
The construction industry, I think it's fair to say that whenever a country faces a recession, construction is typically one of the hardest hit. But there, the government is taking action.
You recently, just last week in Parliament, we passed something called the Infrastructure Guarantee Bill, which is designed to leverage off the government's balance sheet and the strength of that balance sheet, and for the government to issue guarantees to projects, which include construction projects, that are commercially viable, but they're having a tough time getting the long-term financing such projects normally need.
So, the government's able to do that because we're dealing with the deficit, we're dealing with it head-on. That brings confidence, and that brings strength to the government's balance sheet.
BOULDEN: Well look at the third quarter being much better than most analysts has predicted. So, for the year, flat. Is that the best you can hope for?
JAVID: No, I -- I hope -- think things are better than that. But you're right to say that most analysts, I think, weren't expecting those numbers as strong as the one that came out today. It is, actually, I believe, the strongest quarterly growth figure for five years.
But again, I think we must remain cautious. There are severe economic challenges out there in the global economy. We were reminded of that a couple of weeks ago by the IMF when it downgraded virtually the growth forecast of every country in the world.
And that just yesterday, I think, we saw further downgrades of growth forecast for the eurozone. So, those challenges remain, but I think what this shows today is that Britain is a country that is dealing with the problems.
This government, when it came to power in 2010, it inherited a real mess of an economy. And I think what people wanted is a government that lives within its means again and deals with their problems head on, walks on into problems and tries to deal with them rather than running away from them.
BOULDEN: In other words, Richard, the UK government says it's going to continue with austerity, despite the fact of this very good number. But you have to say, it's certainly better to see one percent rise than what we've faced in this double-dip recession, Richard.
QUEST: In a -- brief sentence, Jim, is the row over potentially the prime minister giving a hint about those numbers early, he said there would be good figures, or whatever it was he said in Parliament, is that row blowing over, or is it going to get a head of steam, in a word?
BOULDEN: No, I think it's blown over. He's been cautioned. He said this on Wednesday, he said good news is going to continue, and it did continue. He had the number a day early. He didn't give the number to Parliament, let's be fair. But he certainly hinted to us having the very good number today and, in fact, that's what we have.
QUEST: Jim Boulden, and by the way, Jim, a warning to you, a caution to you. You're looking far too comfortable in that QUEST MEANS BUSINESS seat doing that --
QUEST: Yes. Jim Boulden. In London.
Now, the good news couldn't push stock markets much higher. The FTSE finished entirely flat, with only the DAX managing to eke out any gains. There was way down by Daimler, however, which has had to change its profit forecast for the year. Some poorly-received earnings from France Telecom, also dropped the CAC 40 into the red. It cuts its dividend and ended up more than 5 percent.
So, to today's Currency Conundrum. What was the first -- I love this one. What was the first paper money in North America printed on? Is it an envelope? Was it playing cards? Or was it toilet paper? The answer for you later in the program.
The US dollar fell against, which was up slightly against the euro on Thursday. Those are the rates --
QUEST: -- this is the break.
QUEST: It's a small country which generates a lot of money. It is less than two square kilometers and has a GDP of $5 billion. Outlook, the CNN series where we're examining the business climate in Monaco.
Over the course of the week, four days, we'll be looking at the country's controversial taxation system, we'll meet Monaco's most influential business leaders and entrepreneurs and the traditional industries. And we sit down and talk to the country's current ruler, Prince Albert II.
Today, we want to concentrate on two businesses which have been based in the country for several decades.
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Half the size of New York's Central Park, Monaco has 4,000 businesses, all squeezed into just two square kilometers. This lack of space means that people have to come up with ingenious methods to tack as much productivity into as small a space as possible.
DOS SANTOS (on camera): Monaco's small size affects its companies in many different ways. For instance, this nondescript building on the edge of town is actually home to five floors of a foot cream maker that employs 150 people.
DOS SANTOS (voice-over): Inside of the laboratories of skin care company, Asepta, a local success story as products are very much made in Monaco.
FRANCOIS MAS, EXPORT MANAGER, ASEPTA: Well, Asepta is a 60-year-old story. It started in Monte Carlo, there was a pharmacist who invented a formula for the crew of the casino.
And it was so successful that we -- my uncle and his partner, Monsieur Paul Lacroix, two founders, picked up the formula back in 1944 and started the company at this time, and sold the formula all over the country, and then all over the world.
Sixty years later, we have approximately 240 different products, and we -- the biggest achievements we've done is in the foot market, because Akileine, our foot line, has become the number one here in this country and France. It's like a 40 percent market share.
Our export market is, I would say, about 60 different countries. Of course, not every country is big, but I can say that we're mostly everywhere, in every important market, in Asia, in America also, in the Middle East, and in Europe.
DOS SANTOS: Asepta leases its premises from the state at a hefty discount and admits it would be hard to survive if it had to pay the market rate for rent.
The average rent for commercial property in Monaco is between $650 and $800 per square meter per year. Prices start at around $450 and rise to $1,600.
While the sky-high property prices in Monaco are good news to those who already own real estate, they pose serious problems for any business that requires space.
The chairman of Monaco's Chamber of Economic Development thinks that the principality's future could lie in small, high-tech companies.
MICHEL DOTTA, CHAIRMAN, CDE (through translator): We won't be able to welcome that many heavy industries anymore, so that's why we are looking for high-technology industries, like for example, people assembling watches. Softer and smaller industries.
DOS SANTOS: On the other side of town are the sleek and shiny offices of Giraudi International, which specializes in trading meat. It's a business that Erminio Giraudi started from scratch. He says he was first attracted to Monaco because it had the infrastructure in place to allow him to trade internationally.
The business has grown quickly and has diversified form trading to include a restaurant franchise, swim wear, and even accessories for iPhones and iPads. I could see the synergy between swimwear and Monte Carlo, but identifying Monte Carlo with meats was far more surprising.
For Giraudi, whatever the business, the brand is Monte Carlo.
ERMINIO GIRAUDI, FOUNDER, GIRAUDI INTERNATIONAL TRADING (through translator): All our restaurants started here in Monte Carlo. All our restaurants in the rest of the world say "born in Monte Carlo." This gives it an image, because Monte Carlo is a well-known place.
DOS SANTOS: Reputation counts for a lot in business, and Monaco's cache is its long-established glamour. But its size means it'll always be a niche player in international business. For entrepreneurs, the challenge is where to play.
Nina Dos Santos, CNN, Monaco.
QUEST: For more information on Monaco and our special coverage this week, go to cnn.com/outlookmonaco. QUEST MEANS BUSINESS, we're back in a moment.
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN and, on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Syrian state TV reports that the government will commit to a cease-fire and reserves the right to respond, in their words, "to terrorist attacks."
The planned truce is supposed to start on Friday when the Eid holiday begins. Rebels say they're also on board, but will also fight back if attacked.
Hurricane Sandy is churning through the Caribbean, leaving a trail of damage and destruction. The storm's approaching the Bahamas after it raked over Cuba on Thursday, knocking out power and flooding roads. Earlier, it hit Jamaica and Haiti. Reporters from Jamaica tell CNN some communities there have been cut off by landslides.
The Vatican says the pope's former butler is beginning an 18-month prison sentence today. Paolo Gabriele was convicted of leaking hundreds of confidential Vatican documents. The Vatican says he didn't appeal against the sentence. The computer technician accused of helping the butler steal the papers goes on trial next month.
(END VIDEO CLIP)
QUEST: In Athens, one obstacle stands between the Greek government and a new deal on austerity. The finance minister says only the Democratic Left party is holding up the talks. Privatization will play a big part in any austerity deal. Our correspondent Diana Magnay is in Athens.
(BEGIN VIDEO CLIP)
DIANA MAGNAY, CNN CORRESPONDENT (voice-over): The port at Piraeus is part of the national identity, gateway to the Greek islands and key Mediterranean trading hub. But it's the Chinese who run a large part of it. Chinese state shipping company Cosco Pacific three years ago paying the Greek government hundreds of millions of dollars to manage the Piraeus container terminals.
Panagiotis Gavrieis worked under Greek management at Piraeus in 2001 and then came back 10 years later to Cosco.
PANAGIOTIS GAVRIEIS, COSCO DOCKWORKER (through translator): I don't care if the company belongs to the Chinese or the Greeks. The only thing I care about is that I have a job.
MAGNAY (voice-over): Three years ago, dockworkers here did care. Piraeus was crippled by strikes, workers convinced that Chinese management was against Greek interests.
FU CHENG QIU, CAPTAIN, PIRAEUS CONTAINER TERMINAL: The way Cosco took over, manages its terminal, you know, is strike often (ph). The business, it lost a lot at that time. So we must be quickly changing this situation. This is my duty.
MAGNAY (voice-over): The change was fast and, they say, effective. The strike stopped. The terminals were rebuilt and modernized, the sea reclaimed. In three years, the company says container traffic has trebled.
MAGNAY: It's these blue key cranes, they're called, which have really transformed the kind of volumes that can go through the terminal. They cost $7 million each, were shipped all the way over from China and can lift pretty much twice the amount of cargo each shift as the old ones did.
MAGNAY (voice-over): The part of Greece's state-owned Piraeus Port Authority manages is doing well, too, and although it deals mostly with passenger and cargo traffic rather than containers, the company admits the competition next door forces them to up their game.
STAVROS HATZAKOS, GM, PIRAEUS PORT AUTHORITY: We have a competitor and that is for the first time in Piraeus and first time in Greece, also. That is working and provide the same services as we do. So we must take care of this and we must have an eye on our quality services that we provide to our customers.
MAGNAY (voice-over): Cosco is looking to expand, its Greek operations a bright light in its portfolio.
(END VIDEO CLIP)
QUEST: Diana Magnay reporting there.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Now we asked you in the "Currency Conundrum" what was the first paper money in North America printed on? Playing cards. And this is what it looked like. The French colonial government in Canada ran out of francs in 1685. They began issuing money printed on the standard deck of cards. The money was so popular amongst the colonialists they remained in circulation for the next 100 years. (Inaudible).
QUEST: There is tape, there is glue sticks, there's even something called finger tack -- Tacky Finger, which all looks a little bit unsavory. How about a bit of this? Well, this could all be rather old hat in the future because now there is a new and possibly revolutionary way of sticking things together.
Nick Glass reports for this edition of "Make, Create, Innovate."
(BEGIN VIDEO CLIP)
NICK GLASS, CNN CORRESPONDENT: In the current economic climate, mending things makes obvious sense. Rather than buying new, why not fix stuff, like this dishwasher tray?
GLASS (voice-over): To that end, meet Jane ni Dhulchaointigh, inventor of Sugru.
GLASS: What actually is Sugru?
JANE NI DHULCHAOINTIGH, INVENTOR: Well, it's top secret.
It's a new class of silicone material that we have developed.
The really neat thing about Sugru is a combination of physical properties. The fact that you can mold it by hand and then that it will bond really, really well to lots of other materials and then once you've exposed it to air, it solidifies and it'll set into shape, but it'll always stay a bit flexible and rubbery.
GLASS: You're still exploring what it can do by the sound of it.
NI DHULCHAOINTIGH: Our customers are testing it to the limit. They do stuff with it that we couldn't have dreamt of.
GLASS (voice-over): It's all about patching, mending, salvaging, customizing -- in 21st century language, hacking: the saxophone with easier-to-reach keys; on a child's camera, colorful ridges of armor; and on electrical cables, an insulator. Even that beloved puppet in urgent need of eye surgery, Sugru fixes almost anything.
NI DHULCHAOINTIGH: I'm the kind of person who believes that we should be repairing. That's the nub of why I invented Sugru, really, is because I just hate that sort of wastefulness.
GLASS (voice-over): Jane came up with Sugru while studying product design at art school. She sort of stumbled on the idea without quite knowing what it could be used for.
NI DHULCHAOINTIGH: I just kept looking for applications, you know, there must be something that this material can do. Until my boyfriend, James, said to me one night, well, look, maybe there's not this one perfect thing for this material. And maybe it's not you that is the creative person here. What if everyone else could be the creative person? For me, that was a complete light bulb moment.
GLASS (voice-over): After six years in development, Sugru finally launched in 2009. Now with annual sales of nearly $2 million, the company has a staff of 25 and a customer base of more than 100,000 people all over the world.
NI DHULCHAOINTIGH: It has been a long journey. First of all, the technology has been difficult to invent. And but second of all, we're not a big company with big budgets behind us. You know, we're doing it on a shoestring with an unusual idea that's slightly before its time.
GLASS: So how strong is Sugru? They're still finding out.
NI DHULCHAOINTIGH: So what we've got here is basically something we've done to challenge Sugru. So we've used blue Sugru here to bond the wooden hanger to a glass jug to metal to plastic to ceramic, plastic again and stainless steel.
GLASS: And were you surprised that, you know, it held together?
NI DHULCHAOINTIGH: Yes, absolutely.
GLASS: So why not test it just a little bit more?
Maybe a chair?
GLASS (voice-over): It'll take 24 hours for the Sugru to cure or set before we can see if it can carry the additional weight of the chair.
GLASS: The moment of truth -- yes. Very simple. So there you have it, a classic inventor's tale, a young woman had an idea as a student and sticks with it tenaciously through thick and thin because she believes that all of us need a little bit of Sugru in our lives.
(END VIDEO CLIP)
QUEST: The world of "Make, Create and Innovate." And Jenny Harrison is now going to be creative. For that, you don't need to work too hard today (inaudible) because the heavens have done it for you.
JENNY HARRISON, CNN METEOROLOGIST: Absolutely. (Inaudible) let's start in Europe because it'll be the first decent snowfall of the season. So all those ski resorts (inaudible) liking what's coming this weekend. Now there's a couple of things going on. We've got this very, very cold air, very strong winds coming down from the north. And then the southwest, there's a lot of rain. So a lot of moisture in this particular system. And where the two meet, this is where we are going to see some pretty heavy amounts of snow. Now look at these temperatures. These are current temperatures already -1 in Oslo, just 2 degrees above freezing in Stockholm, that cold air's going to continue to (inaudible) south with over the next couple of days we're looking at some particularly cold temperatures in the overnight hours. In fact Munich Sunday into Monday, Monday into Tuesday, the overnight low about -10 Celsius. But look at how below the average it is, 2 and 1. Saturday and Sunday the average is 13 degrees. That is how cold it is going to be.
Here comes the snow, as I say, it's a dividing line between the cold air and all that moisture in the south. The accumulations, look at this. So, as I say, not so very happy people, some delays at some of the major airports, for example Prague. Be prepared for those delays as we go Friday into Saturday. Temperatures on Friday, just not even really making it above freezing in Stockholm and just 9 Celsius in London. Meanwhile, across in the Caribbean, this is a picture, obviously, from the Dominican Republic. But it's looking like this right the way across Cuba, Jamaica. This is the storm, Hurricane Sandy, still a category 2. We're following this very closely the next 24 hours. It'll be heading across the Bahamas, so pretty much those same things. We've got torrential rains and of course very strong, damaging winds, Richard.
QUEST: Jenny Harrison, we'll follow that in the hours ahead.
And that is QUEST MEANS BUSINESS for tonight. Thank you for joining us. Whatever you're up to in the hours ahead, I hope it's profitable.
NINA DOS SANTOS, CNN HOST: Hello and welcome to MARKETPLACE EUROPE. I'm Nina dos Santos. Businesses across the Eurozone have had a rocky ride of late. And when it comes to the future, well, the outlook is almost as unclear as this foggy sight of the London air behind me. Economic turmoil has heightened concern for that country with high levels of debt and unemployment. It's a climate that has caused some businesses to become more creative in developing new markets to secure their future.
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DOS SANTOS (voice-over): Coming up, a passion for pasta. The renovated water mills grinding out a healthy export market for one family business in Greece.
And the CEO of TomTom tells Richard Quest how he's navigating a path to future profits.
UNIDENTIFIED MALE: It's difficult to envision a world where in 5-10 years from now, where you can -- where cars are most connected to the treadmill (ph).
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DOS SANTOS: Greece is at the epicenter of Europe's debt crisis. It's in its fifth year of recession and with a quarter of the population out of work, well, Greeks have once again taken to the streets to protest against government spending cuts.
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DOS SANTOS (voice-over): The recent general strike shut down much of the country's transport networks. Unions say another round of cuts to wages and pensions are just too painful to bear.
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DOS SANTOS: It's a challenge environment for businesses. Matthew Chance now reports on how one Greek pasta company has managed to buck the trend by exporting 65 percent of its homemade product.
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MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): When you think Greece, you might not think homemade pasta. Why would you?
CHRISTINA PANTELEIMONITIS, OWNER: This is the flour.
CHANCE (voice-over): But that's something one gourmet food producer and the owner of this traditional flour mill in the Greek Peloponnese is determined to change.
PANTELEIMONITIS: People do want to taste products from Greece. And they like, you know, they come here for holidays. And they always enjoy themselves. Then they go back; they want to cook the recipes they've learned. But it helps if they really have the ingredients from Greece.
This is what I do. I put the ingredients for them in a jar and then they can continue cooking with it. They get the tomato sauce or the pasta. But they -- with the flavors of Greece, they can continue cooking and make the dish as they would like it to be.
CHANCE (voice-over): It's in this small commercial kitchen in a suburb of Athens that the range of award-winning Greek delicacies, like saffron pasta, are carefully crafted by skilled and not-so-skilled workers.
CHANCE: That's great. Look at that.
PANTELEIMONITIS: This is the pasta with phyllo. We have the phyllo. And then we put one by one this thickness of saffron from Posani (ph).
CHANCE: This is beautiful Greek saffron.
CHANCE: How much of this pasta do you sell every year around the world?
PANTELEIMONITIS: We produce around 80 to 120 kilos per day.
CHANCE (voice-over): There are other luxury products, too, like olive oil produced on the family farm and salt harvested from Greek island marshes. The company sells about 65 percent is exported, selling mostly to Greeks abroad, helping to avoid the impact of the financial crisis, a good model, says Christina, others should follow.
PANTELEIMONITIS: I believe if many companies like mine, I may be small but many companies small like me are altogether produce products and export them, this is a -- this would be very important for the Greek economy, because that's what Greece is good at doing. She has the perfect -- Greece has the perfect environment, the perfect (inaudible) culture of products. So many small businesses could produce quality products and then altogether it could be a better (inaudible) exports.
CHANCE: Oh, there is it.
CHANCE (voice-over): Back at the flour mill, time to put that recipe to the test, exporting its way out of economic crisis may prove too much to ask. But it's small businesses like this one, giving Greece, at least, a taste of success.
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DOS SANTOS: Matthew Chance there with the pasta producers of Greece.
Coming up after the break, nothing out the future. We think that the CEO of this satellite navigation company TomTom.
DOS SANTOS: Welcome back to MARKETPLACE EUROPE. Well, navigating your way through the ups and downs of the business world is no easy task, even if you've carved out a market for yourself in telling people how to get from A to B. Satellite navigation systems are as much a part of our cars these days as seat belts. And let's face it, where would we be without them?
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DOS SANTOS (voice-over): Founded in 1991, Dutch based TomTom is the world's leading supplier of in-car navigation products. Since 2004, the company has sold over 60 million personal devices. With maps covering over 100 countries, TomTom has 31/2 thousand employees and annual revenues of around $1.4 billion.
DOS SANTOS (voice-over): Richard Quest caught up with the company's chief executive.
HAROLD GODDIN, CEO AND COFOUNDER, TOMTOM: There is a lot of uncertainty in the markets wherever you're dealing whether it's consumer or industry, what have you. It's not a surprise that we see that translated in reduced levels of business in the southern parts of Europe. The more north you go, the better it is. Consumer confidence in general is very low and we also seem to be in a bit of a political crisis as well, where it is not entirely clear what the route it is we need to take out to come out of those, the problems that we're suffering from now, for the third year going.
QUEST: In that very statement, you sum up the problem, don't you? There is an economic crisis, there's a political crisis and there's a leadership crisis.
GODDIN: Yes, the -- and that is not a surprise. I think the way we have chosen to organize ourselves, especially in the European context, is not designed to deal with the crisis and the level of decision-making that we need to go through.
I think there's something else going on that is more a fundamental shift as well with Europe as a -- as a place in the world to live and work and make money. I think there is fear as well that we are losing it a little bit as a continent.
QUEST: How soon after TomTom came to market and the GPS market was opened up by the U.S., the access, how quickly did you realize that you had struck a vein of gold?
GODDIN: It was the first time we bought our new goods to a big trade fair in Germany seated (ph). And we had a very small stand. We didn't have any money. We were, you know, kind of new kids on the block. We had a big box with something in it. And there was more interest what was in that box than I had imagined. And I called the same day to our Chinese manufacturers and I said, you know, guys, we need to prepare a plan to ramp up production because we're onto something here.
QUEST: You weren't wrong.
GODDIN: No. Well, I was still wrong, because I could not anticipate the level of (inaudible) success we would enjoy with that product. And it was unprecedented. Within, you know, within three or four years, we had sold 50 million of those devices, completely new technology, and that it was unprecedented.
QUEST: The revenue went up fast; the production went up fast, the sales went up fast. And you knew that wasn't sustainable.
GODDIN: Yes. Yes. So we knew that this was -- that we had to find out a way -- present ourselves differently and look for other revenue opportunities rather than just the personal navigation devices. And we started that process in 2005, you know, after the initial shock of hypergrowth. We liked to stay in the car business; we're in the driver business. But from 2005, when we started to diversify our activity.
QUEST: Do you think that you've seeded too much ground in the personal handset market now?
GODDIN: No, I don't think so. The whole role of the Internet is coming to fruition only now. You know, if we look a little bit ahead, what we are achieving in the automotive industry and what we -- what we -- what we start seeing with the connected car and the range of opportunities that it's creating in terms of better driving, safer driving, better informed, less CO2 emission ,the whole role that traffic information, reliable traffic information, dynamic guidance can play in the connected cars, difficult to envision a world where in 5-10 years from now, where you can - - where cars are not connected to the network. And that, in itself, will also drive a whole new revolution and a new way of looking at mobility.
QUEST: There's an entire generation that has not experienced the chaos and fear of driving with a map on the knee as you try and work out, was that the third turning on the left? And who's really watching where we're going?
GODDIN: Yes, I think, you know, if you -- if you look back on our company and what we have achieved and what we have done is that we really were there when we started that revolution of using digital maps and all the benefits it brings with it. And I think that's a wonderful thing to look back. I think generally we have changed and we've liberated a lot of people, making it easier and safer and more relaxed for them.
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DOS SANTOS: The CEO of TomTom there, Harold Goddin speaking to Richard Quest. And that's it for this edition of MARKETPLACE EUROPE. Join us again next week if you can. But in the meantime, thanks for watching and goodbye.