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QUEST MEANS BUSINESS
Ford's European Struggles; Dow Pushes Closer to 14,000 Mark; European Shares Rise; Global Market Rally; Return to Risk; Market Optimism; BP Guilty Plea Accepted; Italian Banking Scandal; Dollar Down; Apple to Launch 128 GB iPad; Apple's Falling Shares; BlackBerry's Big Chance
Aired January 29, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Flying in the US and falling in Europe: it's a tale of two car markets for the Ford Motor Company.
Flying everywhere: the truth behind the latest rally in stocks.
And ready to fly: BlackBerry hopes for a bigger slice of the SmartPhone pie.
I'm Richard Quest, back in the studio in London, where of course, I mean business.
Good evening. We start tonight with the story of the Ford Motor Company and how it is trading. Bullish in the United States, Bearish in Europe. Ford's revival in the US is being held back by a recession on the continent. The automaker's 2012 results show the disparity between the two regions. Take a look.
QUEST: In North America, Ford made more than $8 billion, $8.3 billion. That's a new record. Flip across the Atlantic, and in Europe, it lost $1.75 billion and -- here's the worrying part -- expects to lose another $2 billion this year.
There's a major restructuring of Ford Europe underway. That was announced three months ago. The shares of Ford are now more than 5 percent today in New York. I asked Ford's chief financial officer, the CFO and the exec president, Bob Shanks, how, bearing in mind this discrepancy between the US and Europe, they're going to cope with that wide gap.
BOB SHANKS, CFO AND EXECUTIVE VICE PERSIDENT, FORD: Well first of all, Richard, both of them obviously within the total company results, which were very, very strong for 2012, and we expect that to continue in 13.
And what you're seeing is you're seeing one part of the business that has successfully restructured over the last several years, you see another part that's just starting that journey, exacerbated by an external environment that is very, very difficult.
So, just different places in time, but we've got a great plan for Europe and to transform the business there, and we're in the process of executing it.
QUEST: Do you think Europe will require even more reorganization? In other words, are you already revisiting the plan that's in place?
SHANKS: Well, it's only been three months since we announced the plan. The only thing that has changed is that we see 2013 industry being a little bit lower, a little bit weaker than what we had expected last year. But we still think going forward that industry will recover, and eventually, the economy will recover as well.
So, we're very satisfied with the plan that we announced in October, and again, only three months into it, so --
SHANKS: -- at this point in time, we'll continue to look at the environment but execute the plan.
QUEST: Do you think in Europe fundamentally it is a capacity and oversupply, or a demand because of slow economies?
SHANKS: Both. Right now, it's both. We're seeing an industry level that's the lowest it's been in something like two decades. And then, in addition to that, we have overcapacity, substantial overcapacity in the industry, and unwillingness or inability of most of the players to take on that overcapacity.
So, we haven't decided to sit on the sidelines. We're going to restructure our business and do it aggressively, and when the demand does recover, we'll be ready for it and we believe that we'll be able to generate a profitable return.
QUEST: And we turn to the US, which has been such a great market for you, the turnaround in the United States.
QUEST: As the political shenanigans continue, and there's always the risk of little -- of another upset, do you see that as potentially impacting your business in America?
SHANKS: Well, it's certainly something that we have to look at and watch very closely, because back in 2011, when we did have some crisis of confidence around the debt ceiling, it certainly had an effect on consumers' purchase behaviors.
So far, though, we haven't seen any evidence of that. And in fact, there are some signs that the economy may be growing a bit more strongly than what we had thought, towards the higher end of our 2 to 2.5 percent range. So, we'll have to watch it, but so far, no signs of that.
QUEST: That's the chief financial officer of Ford on the story of two markets, the US and Europe, for the company.
Now, if there is a problem between Europe and the US in terms of manufacturing automobiles, when it comes to the stock market --
QUEST: -- there is no such difficulty. Look at the numbers. The Dow is now just 45 points or so away from 14,000, marching inexorably onward, and the talk is, when will it reach that number? We are up 74 percent -- 74 points on the day, again up half of one percent.
European markets finished mostly higher. In fact, only the Zurich SMI was down. It was nearly a 1 percent gain on the FTSE. Oil companies were among the strongest performers in London and Paris, Brent and NYMEX both increased. That, of course, is on the back of the prospect of better economic growth.
It's been almost a one-way traffic for markets in the past few months. Join me at the CNN super screen, and you'll see what I mean.
Now, I know this is something of which investors across the globe are fascinated about, particularly bearing in mind the gains that have been seen since 2008, when we had that -- obviously the massive dislocation.
Let's start with the Dow Jones. You see very clearly the sharp fall. You then see the rise in the market. This over here is what happened last year, and now we put it -- let's try that again. It all came on a bit too quick there.
That's the Dow and the way the Dow has been trading, and you see, of course, the sharp fall in the middle of 11. That is the debt ceiling crisis, and now we're nearly at all-time highs.
Now, we add on the FTSE, the DAX as well, and you see that DAX? The DAX had that very sharp fall in 2011. That was because of the eurozone crisis, and another sharp fall in the middle of last year. Again, similarly, eurozone related. And the FTSE goes on there as well.
The general trend of all the markets is the same. And the reason, of course, for this five-year high and this strong rally, first of all, market liquidity. The stimulus measures from the Fed, the ECB, the Bank of England, and the Bank of Japan. It's pouring money into banks, it's making -- it's creating a lot more liquidity in the market.
Appetite for risk has improved. Once the fiscal cliff was out of the way, the eurozone crisis started to subside, investors literally piling into mutual funds. According to the latest numbers for the first months of last year -- last month and the beginning of this year, they are piling -- I say "they," you and me -- are piling into mutual funds, the largest inflows in years.
And finally, fundamentals. Economic fundamentals. Encouraging data on earnings, US housing prices posted the biggest jump in six years. China is stabilizing.
So, liquidity, risk, and fundamentals. I turned to Bob Parker, the senior advisor at Credit Suisse, and factoring in the market, what we are clearly seeing is this return to risk.
BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: The global corporate bond market rally started in November 2008, after -- two months after Lehman went under. The global equity market rally started in March 2009.
So, I think the first point to make is that this rally that we are seeing in global equity markets is actually not a new phenomenon. In 2012, equity markets generated very strong returns.
QUEST: But what is different is that the ordinary investor is now piling in and is being advised that equities are now back in vogue.
PARKER: The answer to that is absolutely yes, and the data for December and so far in January is very clear, which is that we are seeing record flows, not just retail investors, but institutional investors, into equity markets, whether it be mutual funds, whether it be exchange-traded funds, the weight of capital is now moving decisively into equity markets.
QUEST: You move out -- you move into a fixed income for security, safety, and capital preservation.
QUEST: You move back into equities for capital appreciation.
PARKER: Plus dividends.
QUEST: Plus dividends. So, what's changed that's put risk on?
PARKER: I think a number of factors. The first factor is that the corporate bond market rally, now over four years old, is starting to look tired, and the returns on corporate bonds are now very low. Likewise, the returns on money markets are very low. So, by default, equities are cheap relative to other asset classes like bonds, which are expensive.
QUEST: But -- something is only cheap and it's only worth going into it if you don't fear you're going to lose your shirt.
PARKER: Well, I think --
QUEST: So -- we're getting back to the point that people believe that equities are cheap and safer.
PARKER: Well, I think you raised a very important point, which is the fear factor in markets is going away. And if we look back over the last two to three years, investors were very concerned about the American fiscal cliff. That's now -- that risk is reduced.
They were very concerned about the eurozone breaking up. That risk is now significantly less. They were worried about a hard landing in China. China is now accelerating in terms of growth. So, those potential extreme events, that fear factor, is significantly reduced.
QUEST: Sixty -- say, 70-30, as it was on the balance between fixed and equities? Where would the balance now be between fixed income and -- or other -- or cash and equities?
PARKER: Well, I think the case for having cash doesn't exist, so I'd have zero in cash at the moment.
PARKER: I think the case for having fixed income investments is very limited. So, I would only have for a sort of lower risk balance portfolio, perhaps only 20, 25 percent in fixed income.
And therefore, I would have 75 percent in global equity markets, and a significant part of that I would have in emerging equity markets, and particularly China, where growth is accelerating. The market underperformed last year. It is cheap relative to other markets.
QUEST: Bob Parker of Credit Suisse. It's worth always pointing out that although we gave you numbers there of portfolio balance, nothing that we ever give on this program should be taken as investment advice in that respect. You make your own choices on that.
The chairman of KPMG, the consulting company, Andrew -- Michael Andrew, says the markets are now putting pressure on companies to keep the growth going. I spoke to him at last week's World Economic Forum, and in Davos plus, you can hear him answer, is it too soon to be optimistic?
MICHAEL ANDREW, CHAIRMAN, KPMG: You are seeing a soft landing and regrowth in China. You're seeing a strong private sector balance sheets in the US. You're seeing emerging economies start to reform themselves. So, people are reorienting their investment portfolio into those opportunities.
QUEST: There's two things here, isn't it? There's people with their investments, and the CEOs making decisions. And the two are not necessarily headed in the same direction.
ANDREW: I'm not sure about that. It's the markets that are actually starting to put pressure on the CEOs to grow.
QUEST: But what's the way forward for them to grow? Acquisition? Organic? Combination of both? And if they do, are we back to those days of simply saying, look to East, look to China, look to emerging markets?
ANDREW: I think there's two aspects to it. Doesn't matter whether it's inorganic growth or organic growth. The reality is, there's a can of soup of buying opportunities, asset veins have never been so low. And equally, emerging markets are starting to reform and open up and give more access to CEOs.
QUEST: So, what worries you, then, in this current economic environment? Never mind black swans, gray swans, or white swans, what's on your mind?
ANDREW: The political risk in Europe and whether the people have the continued appetite to stomach appetite.
QUEST: They don't. We know they don't. Social unrest is going to be one of the biggest problems that the Union faces.
ANDREW: That's right, and they have to hold it together. And I'm confident with Monti, with Merkel, and some of the key leadership, there, that's coming through, I think we've actually gone -- the worst is now passed.
QUEST: Monti faces his election. Merkel faces an election. If those go badly -- and I'm a journalist, so I'm obviously going to say if it goes badly, you're sort of question whether that's just me being pessimistic.
ANDREW: We're banking for stability at the moment, and that's very important, I think, in giving long-term confidence about investing in Europe.
QUEST: The chief exec of KPMG. Now, in the past half hour, news just in.
QUEST: A judge in Louisiana has accepted the guilty plea from BP over Deepwater Horizon. BP's pleaded guilty to a total of 14 counts, including manslaughter, and will pay $4 billion to the US government over five years.
We knew, of course, the details. It was a plea agreement. It's the largest criminal fine in history, a further billion dollars in civil penalties will go to the SEC.
Coming up after the break, the scandal surrounding Italy's oldest bank. It's a scandal threatening ructions in the heart of Europe. The trail of accusations after the break.
QUEST: Italy's finance minister is the latest senior official to defend the government over the scandal of the country's oldest bank, Monte dei Paschi. It is getting a government bailout, and the critics say the Bank of Italy didn't do enough to stop it.
The trail goes all the way up to the very top of the ECB, at least under its former head, as Isa Soares reports.
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT (voice-over): Vittorio Grilli has been defending Italy's banking sector following a crisis at Italy's oldest bank, Monte dei Paschi di Siena. Speaking to a committee made up of regulators and representatives of the Bank of Italy, the Finance Ministry says Italy's banks are solid and stable.
VITTORIO GRILLI, ITALIAN FINANCE MINISTER (through translator): In my opinion, it is of the utmost importance to not insinuate that there is a problem or start doubts about our banking system, especially because it is not established with all the facts.
SOARES: Continuing his defense, Grilli told Parliament the central bank had not been lax in overseeing Monte dei Paschi di Siena. Instead, he had been attentive and appropriate. Grilli says even the crisis at the troubled lender won't shake the country's banking sector.
GRILLI (through translator): I have no doubts in our system, not even the events regarding the Monte dei Paschi di Siena modified the solidity of our system.
SOARES: On Saturday, Italy's central bank agreed to provide more than $5 billion to bail out Monte dei Paschi di Siena. The ailing bank has revealed potentially disastrous losses from a handful of transactions.
It is a lot more than just financial issues at stake here. Italy's less than a month away from a national election.
FABRIZIO VIOLA, CEO, MONTE DEI PASCHI DI SIENA (through translator): We've got to underline our disappointment in seeing Monte dei Paschi the center of statements that's evidently are putting it at the center as part of the election campaign.
SOARES: Prime Minister Mario Monti, who is running for reelection, is under pressure to defend a decision to bail out the ailing bank while a scandal is unfolding. Former prime minister Silvio Berlusconi, who is also in the race for Italy's leadership, is trying to play the story to his advantage and make gains against his political rivals, who are currently leading in opinion polls.
European Central Bank head Mario Draghi's also in the spotlight. He was in charge of Italy's central bank when Monte dei Paschi di Siena's problems were building. And he's now facing questions about whether more could have been done to head off the problems.
Isa Soares, CNN, London.
QUEST: Now, for more on this from Rome. Riccardo Monti, the president of the Italian Trade Promotion Agency, joins me live this evening. Riccardo Monti, how damaging is this to Mario Monti ahead of an election? Is this likely to taint the prime minister?
RICCARDO MONTI, PRESIDENT, ITALIAN TRADE PROMOTION AGENCY: Well, I think we should put in the right context the sheer size of this event. We're talking about a minor increase in the already-planned Monti bonds for the bank. So, I don't think this is really a big issue.
Of course, there's an election, there's a campaign, so everybody's trying to use every item to take advantage. But if you look at the hard facts, this is a very minor accident.
QUEST: It may be a minor accident or a minor incident, but what is behind it is -- it is the classic old question, who knew what and when, and who did what and when. Do you believe there's more to this?
MONTI: Well, I do not want to comment. There's an inquiry going on. But as Mr. Grilli said this morning, the Italian banking system is very solid. Italy's one of the very few economies in the world who did not have to do a big bailout of banks. And Italian banks have been traditionally very conservative. So, I think we have a very strong banking systems. This is one of our strengths as a country.
QUEST: Mr. Monti, last week in Davos, the one thing people said -- some said publicly and others said privately -- is the biggest risk, or one of the biggest risks -- in 2013 was the Italian election, that there could be an upset, or that there could be a divergence from reform. Is that your feeling?
MONTI: Well, my feeling is that of course the democratic process involved some uncertainty, but if you look at the fundamentals, Italian accounts are under control, Italy is bound to a number of international treaties to be a good citizen. Our exporting sector had been good -- doing very well. Our export has grown in value, 5 percent. So, I think the solid economy is there.
QUEST: And yet, you have to admit, don't you, the concern is that if this election goes badly, all the good work that Italy has done, including returning to the markets or preparation -- the market's giving its blessings in many ways -- will be undone?
MONTI: Well, of course people have different opinions on this. If you look at the spread, which is a typical measure about the impact of uncertainty on our financial system, it's at its lowest levels in one year.
So, even if we are the most uncertain point of the campaign, spread is well under control, around 2015, vis-a-vis the German bonds. So, I'm pretty optimistic, and I think the election will not generate that much turmoil.
QUEST: All right. Mr. Monti, thank you very much, indeed, for joining us from Rome this evening. We thank you. We'll talk more about it, obviously, with you. Come back again when the election is closer.
Now to tonight's Currency Conundrum. Which is the oldest -- oh, I do like this one. Which is the oldest currency still in use? Is it the peso, the pound sterling, or the yen? Straightforward, absolutely no Googling to find the answer. None whatsoever. I'll take -- I'll mention the first person who comes up with the right answer @RichardQuest. Which is the best one -- which is the oldest one?
Now to the rates. The dollar is down against the euro, the pound, and up against the yen. Those are the currencies --
QUEST: -- this is the break.
QUEST: Apple has beefed up the storage on its highest-spec iPad, 128 gigabyte. The iPad 4 will launch next week. If gigabytes mean nothing to you -- it certainly means nothing to me -- let me put it this way. It can hold twice as much of your music, videos, and photos as the current top spec. Twice as much!
Of course, it means you've got to buy more from iTunes, so I guess there's a certain method in their madness, so that you can shunt more stuff into this new high-spec, top-rated, overloaded iPad.
Apple shares are up around 1.5 percent at the moment. Take a look at the share price as it has gone. That's an interesting one, isn't it? Oh, look at that woeful right the way down, but a little blip up as it continues its fall.
Lately, investors' dizzying enthusiasm has been tapering off, with the shares on a similar downward trend to Newton's apple. After hitting $700 a piece in September, they're now $458 -- $300, people suggest, that is on the cards, but we make no progress or prognostications on that.
Compared to the NASDAQ index and you'll see Apple is clearly going in its own direction. So remember, we had Apple going down, the NASDAQ very much following the sort of trend that we saw with the Dow, the FTSE, and the DAX earlier in the program. That minor dip in November is pretty much back to September levels for the market overall.
BlackBerry maker Research in Motion knows only too well what it's like to see the star fade fast. Now, there is the imminent launch of the BlackBerry 10 operating system, and the company is hoping that it's going to gain a hefty slab of the SmartPhone market.
Jim Boulden is with me. Jim, we'll know what the 10 looks like --
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
QUEST: -- what it feels like. I've had a bit of a -- I had a claim in it.
BOULDEN: You saw one of the -- the sort of beta ones, didn't you?
QUEST: I saw one of the beta ones --
QUEST: -- both with a screen -- with a real keyboard and without. But what we need to talk about --
QUEST: -- is the SmartPhone market.
BOULDEN: Let's remember where RIM is now, RIM being this color. It is five percent of the market in the third quarter of 2012. Five percent for Research in Motion and BlackBerry.
Who's in the pink? Well, we all know who's in the pink. This is Android from Google: 72 percent. For the year, around 70 percent, but that's extraordinary, where Android has gone. That's HTC, Hauwei, all the Asian makers. They are using Android. Samsung, of course, the biggest player in all of that.
QUEST: I'm jumping in here.
QUEST: This is extraordinary.
QUEST: I didn't realize if you had said to me -- I'd have said, iPhone I thought might be 30-odd percent, but it's not, iPhone's just 14 percent.
BOULDEN: That's in the quarter, 20 percent for the year, about, yes.
QUEST: Twenty percent for the year, but it's that Android number --
QUEST: -- that's extraordinary. And the RIM number, which is quite dramatic.
BOULDEN: Let me take you back to Android just for a second --
QUEST: Yes, sorry.
BOULDEN: -- then we're going to go to another year. OK, so this is third quarter 2012. Let's go to 2009. Look at Android. Four percent. Now, of course, it had just come out, and so very few handset makers were using the IOS Android.
Who was the big one, Richard? You know the big one. Symbian, Nokia, 47 percent. Around 50 percent of the market, we would say, that Nokia had --
BOULDEN: -- of SmartPhones between 2002, 2009. Let's look at today. Well, it is unbelievable where we are. We are at -- there it is, come on in -- 3 percent for Nokia. That's gone from 47 percent to 3 percent.
QUEST: This is absolutely extraordinary. Now, we know the reason. Android is free to the --
QUEST: -- to the handset makers. That's why it's so big. But -- I'm having great fun with this, by the way.
QUEST: Because this is really quite remarkable numbers. What's RIM hoping for out of its 5 percent?
BOULDEN: Look -- yes -- we know they have lost a lot of corporate customers. They've lost a lot of very faithful people because the BlackBerry 10 was supposed to come out last year, it was supposed to come out the end of 2011.
I still have one. I still have a couple in the family. People like me want to see RIM succeed to be number three. That's as much as they can hope to be is number three. There is no way they're going to come back and take away a huge amount from Android.
They need to become a successful, profitable company with a good BlackBerry that people will use, maybe take this from 5, 6 percent to 15 percent. That would be, I think, a huge boost for the new heads of BlackBerry and RIM.
QUEST: Absolutely extraordinary. Jim, interesting stuff.
QUEST: SmartPhone market. We will watch this one tomorrow. The market, of course, and that announcement from BlackBerry comes out tomorrow.
When we come back, border security, pathways to citizenship, and tougher employment rules. They are the hot topics in the United States, whether you're a taxpayer, an illegal immigrant, or a business. The president in the US will reform.
RICHARD QUEST, CNN HOST: 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): Anti-government demonstrations continue in Egypt. This is a protest that took place in Cairo. Three cities on the Suez Canal are the scene of worst violence. They're about to spend their second night under curfew.
A gruesome discovery in the Syrian city of Aleppo. Activists say at least 81 bodies have been found in a river and they were shot execution style. Rebel spokesmen said some of the dead have been identified. And according to relatives, they have been detained by the government's force intelligence unit.
Inhabitants of Timbuktu in Northern Mali are telling of repression and fear and Islamist rule. These images also show how rebels torched precious ancient manuscripts. (Inaudible) French-led offensive, there are concerns that the forces are regrouping further to the north.
Brazil is mourning the victims of last weekend's deadly night club fire and investigators are putting together the chain of events that killed 234 people. Four people are being held in connection with what's happened inside the Kiss night club in the southern city of Santa Maria.
Israel's central bank governor says he's stepping down at the end of June. Stanley Fischer has been in the job for the past eight years. Some economists credit him for successfully steering Israel through the global economic crisis. Governor Fischer has given no reason for his early departure.
(END VIDEO CLIP)
QUEST: In the next half hour or so, President Barack Obama is to make his pitch for immigration reform. This is significant because the U.S. president has made the issue a top priority after facing criticism for failing to deal with it during his first term.
And in fact, previous presidents -- notably President Bush and President Clinton -- all failed to make long-lasting proposals with reform for the immigration and illegal immigration in the United States.
The president will be outlining his plans in Las Vegas a day after a bipartisan team of senators laid out their own compromise version. One of them is Dick Durbin, the Democrat majority whip.
(BEGIN VIDEO CLIP)
SEN. DICK DURBIN (D), MAJORITY WHIP: We are requiring that these people pay their taxes, pay a fine, go through a criminal background check, have a job. Basically we're putting them in the back of the line in terms of new employment, back of the line in terms of citizenship.
What we're trying to do is to make certain that the 11 million now living in the United States in the suspended status have a future, make them part of the future so long as they good for the future of America. And I believe they will be.
(END VIDEO CLIP)
QUEST: Now you can see here why this is a growing problem for the president. Immigrants in the United States make up 13 percent of the population, 16 percent of the labor force. And the gap is widening. If you look at the total population and the U.S. immigrants in the labor force.
The senator's plans include a crackdown on the hiring of undocumented workers. So to Julie Myers Wood, who headed the Immigration and Customs Enforcement Agency for George W. Bush, now advises businesses on compliance and joins me from, I would say, I suppose, a bastion of immigration, at least, the city of Miami, where -- and I (inaudible) in the -- in the kindest and politest way.
Julie Myers Wood, we are -- everybody in the U.S. political system knows, quote, "something must be done." But it has been finding that key to unlock the door, whether a pathway to citizenship or simply getting the undocumented into the system. What do you want to hear from the president?
JULIE MYERS WOOD, FORMER ASSISTANT SECRETARY OF HOMELAND SECURITY, ICE: I want to hear the president -- hear from the president that he's committed to actually getting something done, that he's committed to working with a team of senators and that he's going to use his considerable capital to push something through.
You know, everyone likes to say the immigration system is broken. It, you know, it takes people rolling up their sleeves and actually working on a pragmatic proposal. That's what we need, not a lot of rhetoric.
QUEST: All right. All right, a pragmatic proposal, something must be done. You want him to work with -- but what do you want him to do?
WOOD: I want him to look at specifically at the framework presented by the senators and say where he agrees or disagrees and then let's see. Can we craft something together to put something as a whole, a comprehensive program, or are there specific pieces that we can move forward? For businesses out there, doing nothing isn't an answer.
I mean, day after day, they have to, you know, play enforcer because the government doesn't do enough, a good enough job in keeping people out there coming to the country illegally.
QUEST: Do you --
WOOD: So, you know, I think that president, working with the Senate, will make a real difference.
QUEST: Do you believe that businesses would like to see the pathway to citizenship and the undocumented become documented? In other words, rather than clamping down and throwing out, they would like the -- they would like those already there to be brought into the system.
WOOD: I think there is a split among business owners. I think many want undocumented workers to have a pathway to citizenship. Some are, you know, are happy with the temporary worker program.
But all of them are seeing problems in their labor force, not getting enough workers, not getting the kind of workers they need and then having a frustrating moment when they realize that somebody they screened is not in the country illegally and they're going to have to fire that person. So I think all business owners want something. Precisely what it is, you know, the devil's in the details.
WOOD: And that's going to be the problem for this president and for the Senate, you know, how can we get something to move forward, as George W. Bush spent a lot of capital trying to move something forward in his second term. And yet, you know, we had Senator McCain, Senator Kennedy (ph); we couldn't get it done.
QUEST: All right.
WOOD: We're now here again, four years later, eight years later, let's get something done.
QUEST: You see, you -- there's -- I mean, Julie Myers Wood, let's be realistic. There is no way that the Republicans are going to give a Democrat president at this particular point in the -- who's already -- who's already routed them on the budget and the fiscal issues, another victory on immigration.
WOOD: You know, we need this victory for the American people. And so I think that people of all parties are seeing that something has to be done. But you're right. People are going to have to put partisanship aside. They're going to have to put kind of small issues aside and look at what's the system we have now and is it working?
And I, as a senator, as a member of Congress, I'm going to have step up and do the right thing. And I think the president has to do that as well. They have to do something pragmatic. I hope what the president comes out with is something that the Congress actually would consider and not something that's really more kind of pie-in-the-sky. We don't need pie in the sky.
The enforcement agents actually need something that can be done. The people who are here illegally need a way to regularize (ph) the status. And you know, it's gone on too long, in my personal view.
QUEST: Well, and that's the view we want to hear, because you're an expert on this subject, which it's good to have. Which is just as well you're on the program and talking about this, Julie Myers Wood, you and I will talk more about this in the future. That much I know.
Good to have you on the program. Please come back and help us wend our way through this thicket of difficulties, joining us from Miami. A lovely day over there in Miami.
Now whether you are a backpacker or a high roller, the hotel chains are raising their game. In a moment, we're going to hear from Marriott's chief -- I beg your pardon. We are going to join the U.S. president on immigration.
(LIVE COVERAGE OF PRESIDENT OBAMA'S IMMIGRATION EVENT BEGINS)