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QUEST MEANS BUSINESS
Obama, Iranian President at UN; Economic Sanctions' Effect on Iran; US-Iranian Diplomacy; US Markets Lackluster; State of Europe; US Debt Ceiling; European Markets; Carnival Shares Slump; Elop Payoff; CEO Pay Outrage
Aired September 24, 2013 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: It is the final moment on Wall Street. There's a lack of clarity on the US budget and a lack of direction in the markets. It is Tuesday, September the 24th.
Tonight, a new direction, a new diplomacy. Iran's president is about to speak at the United Nations. You will hear it right here.
A bonus backlash. Nokia admits giving misleading information about Elop's payoff.
And out of recession and still knee-deep in austerity. It's a mixed blessing for Spain.
I'm Richard Quest. I mean business.
Good evening. "The basis for a meaningful agreement." Those are the words you probably thought you'd never hear from the president of the United States when talking about Iran.
Today at the UN General Assembly, President Obama said just that. And in doing so, endorsed a potential diplomatic solution to Iran's nuclear program. You hear about it on this program. The president said Iran's economy would benefit directly from cooperation with the West.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For while the status quo will only deepen Iran's isolation, Iran's genuine commitment to go down a different path will be good for the region and the world and will help the Iranian people meet their extraordinary potential in commerce and culture, in science and education.
(END VIDEO CLIP)
QUEST: Now, the Iranian president, Hassan Rouhani, the new president, is expected to speak at the United Nations very soon, within the next hour. The current speaker, I think, is the president of Austria, who is addressing the General Assembly. We're not sure whether he's third or fourth or second in the list. We know that Rouhani is sixth in the list. When he speaks, we will bring it to you.
While we wait for that, Reza Sayah is live in the Iranian capital, Tehran, with us tonight. We've much ground to cover. Let us begin. This sea change that is happening in relations, is it being fully reported and amplified in Iran?
REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: It's certainly being reported by the state media. And whether it would be reported or not, what's amplifying it is the mood of the Iranian population.
We've been here on numerous occasions, Richard, and the mood and the optimism and the hope that we're seeing is unprecedented. Iranians are hopeful that after 34 long years, this bitter rivalry with Washington, there is a possibility that maybe the US and Iran will have improved relations, and the source of that optimism is Iran's new president --
SAYAH: -- Hassan Rouhani. What's incredible is that he hasn't even been on the job for two months, but he's injected a lot of optimism considering what he's done. He's become pen pals with President Obama, exchanging letters with him, pushing for better relations, and that's what's energized the Iranians.
QUEST: Now, the reports from the pool with the president say that this idea that there would be an encounter between the two men, a handshake, a hello, not a meeting, but the reports say that such an encounter proved too complicated for Iran back home. What do you think that means?
SAYAH: Well, my sense at this point, Richard, is that it's a mistake to read too much into the fact that the handshake didn't happen. And that's because, according to state TV here, the English language press TV, that they anticipated a possible crossing of the paths between the two presidents to take place at a UN luncheon in New York.
But according to state media, President Rouhani didn't attend that luncheon because of the presence of alcohol. Alcohol, of course, generally forbidden by Islam and the Koran, so the reason that these two presidents didn't cross paths could be because of alcohol being at this luncheon and nothing more.
But even with this handshake and this meeting not taking place, certainly there's all sorts of signs that both these governments are making moves to at least set the stage for possible diplomatic relations. Of course, the big issue --
QUEST: OK, but --
SAYAH: -- standing in the way is the nuclear program.
QUEST: Right, but what's the -- what's the end result, here, do you think? You've been studying this for years. You've been there many times. You're talking about a city like Tehran, which was firmly in the West camp, which had a fairly liberal interpretation pre-Ayatollah Khomeini, and now of course, when -- so, are people looking there for a relaxing of the strictures?
SAYAH: Absolutely. I don't think there's any question about it. You're increasingly seeing a lot of analysts, observers, and experts saying there's no reason that these two countries shouldn't sit down and at least talk to one another.
Have they been getting along for 34 years? No. But if you look at Iran at this point and look at the region, you can easily argue that Iran is the most secure and stable country in the Middle East. You can also argue that compared to other US allies, namely Saudi Arabia, Bahrain, that Iran is even more democratic.
SAYAH: So, put those reasons together, and many are saying why not? Why not these two countries sit down and talk together? And imagine the possibilities if they establish diplomatic allies. The US all of a sudden will have all sorts of options in solving difficult problems in Iraq, Afghanistan, the Israeli-Palestinian issue, and of course, the Syrian issue.
QUEST: Reza --
SAYAH: So, a lot is to be gained if these two countries sit down and talk to one another, but certainly, many obstacles remain, Richard.
QUEST: And you espouse there a very wide agenda of benefits. Reza Sayah, live in Tehran for us this evening. We will bring you President Rouhani's comments, speech, to the United Nations when he gives it.
The big issue, of course, had been the question of sanctions. Now, earlier, the White House had said it was leaving the door open for some sort of interaction with the two presidents. Jim Boulden now takes a look at exactly how international sanctions that are in force largely on the behest -- or at the behest of the United States on the nuclear question and how those have affected Iran.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Economic sanctions have been repeatedly imposed on Iran over its uranium enrichment program, but going well beyond UN deterrents.
Europe, for one, tightened its own sanctions late last year when it banned European firms from dealing with Iran's natural gas shipments. That on top of its ban earlier last year on importing Iranian oil. It also banned banks and insurance companies from doing business with Iran.
Now, Europe sees some light at the end of the tunnel under new president Hassan Rouhani. Talks on Iran's nuclear program could be kickstarted again after meetings this week at the United Nations.
CATHERINE ASHTON, EU POLICY CHIEF: What I saw today was energy and determination to try and move forward in our talks. Many things flow from that.
BOULDEN: The biggest impact on Iran's economy has been the longstanding sanctions imposed by the United States. With no diplomatic relations for more than 30 years, Iranian oil has not flowed to US gas stations, and American oil giants and banks have not invested in Iran's creaky oil industry. And since oil is paid for in dollars, the Iranian economy has been starved of hard currency earnings.
BRYAN PLAMONDON, IHS: The sanctions have been very impactful in terms of the currency, in terms of basically eroding purchasing power by having a much weaker currency. And also higher inflation. So, inflation is now around 40 percent, which is, again, a significant drag on businesses and households.
BOULDEN: The US also tightened sanctions last year, telling financial firms to freeze assets suspected of coming from Iran. This hit Iran's trade with companies from, say, India and South Korea, which also trade in the US.
Some companies got waivers from Washington, but many others simply stopped trading with Iran in fear of violating trade embargoes, even if it wasn't clear they were.
BOULDEN: So, despite some fears in the West that sanctions that hurt households could backfire, demonstrations last year in Iran were laid at the door of sanctions and, in part, ushered in the new leadership.
Jim Boulden, CNN, London.
QUEST: So, let's put this into some perspective on the question of sanctions and what's likely to happen next. Joining me, Patrick Clawson is an Iran expert, director of research at the Washington Institute, was also a senior economist at the International Monetary Fund, the IMF. Joins me from CNN Washington.
Patrick, good to see you, thank you for joining us. The question of sanctions and how far that is driving Rouhani's wish to enjoy better relations, where would you put it?
PATRICK CLAWSON, DIRECTOR OF RESEARCH, THE WASHINGTON INSTITUTE: Well, Rouhani was elected on a platform of improving Iran's economy, and he knows that's not possible unless there are sanctions relief, and there's no possibility of sanctions relief unless there's a nuclear deal. So, Rouhani is eager to get a nuclear deal so that he can deliver on the issue that brought him into office.
QUEST: And yet, to go down that road is such a reversal of the previous -- of Ahmadinejad's eight years of confrontation and belligerence, one wonders how that can take place.
CLAWSON: Indeed, it -- Supreme Leader Ali Khamenei is the guy who really calls the shots about foreign policy and the nuclear issue, and he's the one who's done, it seems, quite a bit of rethinking.
Because now he's talking about what he calls "heroic leniency," which is something that he used to explicitly reject. And he used to recommend a policy of resistance, resistance, resistance. And now, he's not talking about that. That's the big change.
QUEST: So, economically -- since we're a business program, let's put it into the business sphere -- economically, if sanctions -- let's just go into the realms of blue skies. If sanctions are lifted, Iran starts to produce oil and export such as it can at its maximum capacity, its economy recovers, it's a large economy, where does that put it as a player in the game?
CLAWSON: Well, if in parallel we see better economic policies instead of the erratic populist policies of Ahmadinejad, if we see this professional and pro-business team that Rouhani has appointed able to implement their policies, we could see a reduction of the control by the revolutionary guard kind of companies that have drained Iran's economy, and Iran could have serious growth.
QUEST: Would you -- if you were advising a corporation, would you now be saying, whether it's oil and gas or a multinational, would you now be saying to them, "Something's happening here, it's time to start planning for what might, if"?
CLAWSON: Keep an eye on Iran and maybe in a year or two start planning for what if. But so far, it's a little premature.
QUEST: So, I'm being previous, is what you're saying?
CLAWSON: Well, long-range planning, not short-term planning.
QUEST: Good to see you, Patrick. Thank you for helping us under what's happening.
CLAWSON: Thank you.
QUEST: Now, the markets and how the trading day finished. Alison Kosik is at the New York Stock Exchange. I think lackluster -- not you, my dear -- but lackluster --
QUEST: -- the day.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: That's a very fine word to put on this session, Richard, you're right. Investors really didn't know which way to look today. There was this push and pull going on with the data that came in, a positive report on housing crisis, a negative report on consumer confidence.
Investors at this point, they're just not sure if the glass is half full or if it's half empty, but it looks like they're erring on the side of half empty when you look at the numbers, the Dow falling 66 points today.
You're not seeing a rush to buy in because there's this repricing going on of stocks after they've been bid up so high in light of the conflicting data, and then what the Fed did about no tapering. Richard?
QUEST: We thank you, Alison Kosik at the New York Stock Exchange.
Now, they're still talking at the United Nations. There are six speakers who are working their way through. When we last checked in, it was the Austrian president who, I think, was talking. We'll continue to monitor who's talking next.
The struggle for Athens continues. When we come back, a second strike in a week for Greek workers, and the Troika's in town. Ken Rogoff joins me after the break. This is QUEST MEANS BUSINESS, good evening.
QUEST: The Troika returned to Greece today to check on the country's progress in its meeting bailout targets. If you join me at the super screen, you're going to see that Greece, along with other countries -- let's put this into the overall picture.
We begin with Greece, where there have been the second major strike in a week. There was anger over public sector job cuts. The troika is now back. Schools have been shut down, hospitals are operating with a skeleton staff.
And the core question remains, if and maybe when Greece is going to have to -- they don't want to call it a second or third bailout, another bailout, a restructuring, whatever else you want to call it.
Let's talk about Spain. Spain, according to the prime minister, Mariano Rajoy, he says that more austerity is coming, but that the country is now out of recession, which is good news for the nearly 30 percent unemployed.
Arguable, the sort of austerity and the sort of taxes that will have to be, the property taxes, will cause a great deal of anxiety.
Contrast this southern periphery with what's happening up in Germany, the Ifo index, and it just keeps motoring on. Business confidence has risen for the fifth month in a row. It's a healthy rise of the Ifo.
It's anecdotal as much as anything else, but it does show -- I mean, one can -- this is me doing this, this is nobody else -- one can literally draw the line through Europe like that. Maybe even one could even tighten it to those countries doing well versus the periphery and the southern countries that are not.
Ken Rogoff is professor of economics at Harvard. Ken joins me now. What an interesting -- I think that's the word to use, Ken -- situation we are in when you've got what's happening in Germany with its recovery and its strength and the southern states.
KEN ROGOFF, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY: Yes, there's quite a contrast, and Richard, I don't think there's any question that they need more restructuring in Greece, they need more restructuring -- some restructuring in Portugal. Frankly, they need it in Spain, they need it in Ireland.
And people have been hoping that with the German election past, there'd be more flexibility in that direction, maybe to do it quietly, under the table. We'll see. Because I think if they don't, those countries are going to be growing slowly or in recession for a long time.
QUEST: Right. Pre-election, Merkel made it quite clear, as indeed did Schaeuble, they made it absolutely clear, no further tranches of debt reduction, no further private sector involvement, they're not going to do further haircuts. Do you think that's a mistake?
ROGOFF: It's not credible. They're not willing to let Greece blow up and let contagion happen, so I think of course there's going to be some kind of third program. They want to do it quietly, so for example, the way Draghi did it a year ago where he did this policy that he never even had to implement, and it helped bring down interest rates.
But they're worried about Italy, they're worried not just about Greece. They need a broader plan here.
QUEST: OK. So, we'll put these on the back burner just for the second, because it's not -- it's pressing, but it's not urgent. Urgent is the US budget showdown. Senate's debating the House bill, it's clearly not going to go further than anywhere that we can expect. How serious is this situation?
ROGOFF: Well, it's awful in the middle of slow growth like this not to be able to get anything done. I view this as a constitutional crisis. It's not an argument about debt, it's about where the country's going, how to spend it.
What's the power of the House of Representatives versus the president? They've got this new weapon, the debt ceiling, that they're using very effectively. So, it's a very important moment in American history. It's not just about the debt ceiling, it's about much more.
QUEST: The budget -- the government may be shut down, the US government may be shut down next week because of a budget imbalance, a budget deadlock. Do you really -- I've seen one statistic on the debt ceiling that says some people believe up to 40 percent likelihood of a debt default. Do you give that credence?
ROGOFF: No, no, that's ridiculous. I mean having a debt default now where we just hold our breath and say we're going to default --
QUEST: Yes, yes.
ROGOFF: -- that sounds really high. That is such a dumb thing to do for a country which is the reserve currency which gets this giant advantage out of it. It's suicide even to flirt with this.
Look what happened with the tapering where they just breathed word about that, what that can do to markets. I think one shouldn't underestimate what a needless technical default would do, it would just be ludicrous for that.
But on the other hand, this really is a constitutional crisis where the House is trying this weapon to see if it can gain power, and of course, the president can't give in.
QUEST: Ken Rogoff, thank you very much, indeed, for joining us from Harvard. Good to see you as always, sir. Many thanks, indeed.
Now, most European markets closed the day higher, helped by those upbeat figures on the German business confidence, the Ifo numbers. The London, Paris, and Frankfurt, they all saw gains -- nice gains, by and large, a little small loss for the Zurich SMI, the only major market to finish in the red.
Shares in the cruise operator Carnival are sharply lower. They're off more than 7 percent, that's after Carnival announced a 30 percent drop in its third quarter. The owner, of course, Carnival, is the owner of the infamous Costa Concordia, also warned bookings for the next 12 months are down on last year.
The stricken Concordia was righted last week 20 months after it crashed off the rocks in Giglio Island in Italy, 32 people lost their lives. It was the worst in a series of accidents, mishaps, disasters, whatever you want to call it, to happen to Carnival.
When we come back, talking of mishaps, some would say self-inflicted, Stephen Elop -- well, he hasn't had a mishap, he's just got a huge new bank account, more than $30 million will be his golden zipline between Nokia and Microsoft. The payoff has infuriated the public and the politicians. The Elop payoff when we come back. This is QUEST MEANS BUSINESS.
QUEST: Nokia's chairman has admitted that the former CEO, Stephen Elop's, enormous payoff is unusual. On Friday, Risto Siilasmaa told two major newspapers that the contract was the same as his predecessors'. That's what he said then. Today, he admitted he'd made a mistake.
Now, join me at the super screen and you will see exactly where we're going. There we go. Here we go. This is the story. So, Stephen Elop's agreement included a share price performance bonus that no other CEO at Nokia had had. The change gave Elop $20 million in stock awards.
But of course, it was all dependent on the price of the stock, the performance of the company, and what many are saying it incentivized Elop to basically sell the company, $20 million. Which is quite outrageous -- that's not my words. Those are the words of the Finnish prime minister. "Quite outrageous," he described it.
As for Elop's golden good-bye, if you look at it, it works -- now, get right in there -- it works out at $1 million for every billion dollars lost in market cap under the Elop leadership. It's certainly been a profitable time for him.
And if we move on, and you can see exactly how this has actually happened -- beg your pardon. There we are. Elop got -- this is the golden zipline. Elop got $6 million when he went from Microsoft to Nokia in 2010.
Since then, he managed to sell the company -- or he did a deal to link the two up, he then sold a large part of the company back to Microsoft, and now, he's getting another $20 million to go back there at the same time as Elop himself also goes back to Microsoft. In total, you're looking at -- $30 million for a man who went from Microsoft to Nokia, sold the company, and made his way back.
Timo Soini is the head of the Finnish opposition party, the True Finns. He lives in Espoo, where Nokia's headquarters are based. Not surprisingly, he's spitting feathers.
TIMO SOINI, FINNISH OPPOSITION LEADER (via telephone): We are thinking here, what has happened and what are the motives? But it seems to me that if you search a Microsoft man, you will get a Microsoft man.
And of course, those bonuses received, which are nearly $200 million extra paycheck, and that is annoying by our standards. And we have found out today that there was a new deal done on the day Microsoft was sold, and this is also a big piece of news today.
QUEST: Do you think, though, he has acted in the best interests of Nokia and that whoever had been the CEO would have had to make similar decisions?
SOINI: Nokia is a kind of institution in Finland, and maybe for a non-Finnish person, it may be nearly impossible to understand the importance of Nokia. It's just not a company, it's a part of Finnish culture and our history and something we have been proud of.
And all our remembering this, we are a bit suspicious what has happened and things like that cannot be measured with a calculator. So, though it's hard to say, I wouldn't say anything illegal has happened, but now the shareholders and the whole Finland, it's kind of mixed feelings.
QUEST: Sir, would you like to see shareholders reject this pay package? Would you like to see them make it clear their anger at this?
SOINI: I'm sure when the small holders go to the meeting, they will raise the issue, and I think that there will be a lot of red ears and -- it is difficult to say whether it can be withdrawn, but it is a sure case that in Finnish public opinion and on the small holders' minds that they feel cheated.
QUEST: That's the Finnish opposition leader talking to me earlier from Finland.
After four days of bloodshed in a besieged shopping mall, Kenya's president says the attackers have been defeated. We'll be talking to Nairobi when we return. QUEST MEANS BUSINESS.
QUEST: Hello, I'm Richard Quest. There's 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): The Iranian president is expected to speak at the U.N. General Assembly within the next hour or so. Hassan Rouhani has called for greater international cooperation on issues, including Tehran's nuclear program. It's now been confirmed that he won't meet with the U.S. President Barack Obama.
Almost 50 people have been killed by a 7.0 magnitude earthquake in southern Pakistan. Buildings collapsed and officials fear many more victims could be found. The earthquake was so strong it caused a small island to rise off the coast. The island is more than 10 meters high.
A U.N. chemical weapons team is expected to return to Syria on Wednesday. They're set to investigate claims of additional chemical weapons use made by both the regime and rebels. During their first visit, the inspectors concluded chemical weapons were used in August the 21st attack.
Russian prosecutors have accused 30 Greenpeace activists of piracy and say they will prosecute them for trying to board an oil platform in the Arctic Ocean. The activists and their ship were detained on Thursday during a protest against oil drilling.
(END VIDEO CLIP)
QUEST: Kenya's president says the attackers at the Nairobi shopping mall have been defeated after four days of bloodshed. In a live statement to the nation, Uhuru Kenyatta told Kenyans it was now time to move forward.
(BEGIN VIDEO CLIP)
UHURU KENYATTA, PRESIDENT OF KENYA: With our openness and inclusivity, we shall confront and overcome the challenges facing us as a nation. We shall rise as one, defend and build this nation together. In one accord, we have triumphed.
(END VIDEO CLIP)
QUEST: Nima Elbagir is in Nairobi for us this evening.
It's difficult to know where to begin. I mean, the hostage situation may be over. But who was responsible literally, figuratively, how many people, were they all caught, what did they want, what -- I mean, there are so many questions here, Nima.
NIMA ELBAGIR, CNN CORRESPONDENT: Absolutely, Richard. And President Kenyatta's speech really didn't answer many of them. All we know is that the hostage situation is over. We don't know crucially, most critically for the families waiting at home tonight, we don't know what happened to the hostages remaining inside that building.
President Kenyatta also said that the three floors of that shopping center collapsed. So for those -- for those families of the 65 people who are still missing, they're going to have to wait quite a few days while those bodies are being taken out from inside the rubble.
Another question that all of us have been asking over and over again is the nationalities of the attackers. We've been hearing from various Kenyan government officials that there possibly were American nationals and a Brit involved in the attack.
President Kenyatta said that although intelligence reports showed evidence of those Americans and a British woman that they wouldn't know definitively until the forensic evidence came in, Richard.
QUEST: It's easy thousands of miles away to question and second guess how the Kenyans handled this.
But from where you are, is the perception that they did as well as anybody could, any country could, facing such appalling terrorist activity?
ELBAGIR: I think so Richard, and I think President Kenyatta, when he said we are bloodied but unbowed, I think many Kenyans really felt those words. This is a country that has lived under a terrorist threat for years.
And that's what instigated their entry into Somalia as part of the African Union forces, which the Al-Shabaab militants who carried out this attack are claiming, that that was the reasoning behind their staging of this.
The Kenyans really feel that they've been paying a price with their security; they've also been paying a huge financial price. Tourism makes up over 60 percent of Kenya's GDP. And when you're constantly dealing with terror threats and Al Qaeda warnings, it's hard to convince people to keep coming.
What's been interesting, actually, is that even in spite of all this, neither the Brits nor the U.S. have warned their nationals definitively from coming to Kenya. They've all obviously warned them to stay away from this area and to stay close to home while this is going on. But they haven't told them not to come to Kenya.
And Kenya government officials that I've been speaking to say that they're incredibly grateful for that, because they're already worried about the impact this is going to have on them financially. And the last thing they need is a travel advisory warning, Richard.
QUEST: And I'm not conflating the two issues as being equal in any way because obviously the loss of life in this case is absolutely horrific.
But on this question of the economic effect, you also have had recently the Nairobi Airport burned down or the international terminal burned down. Now you have a crisis or potential crisis of confidence on tourism, which is such a major part of the economy.
When do you think they will address this side of the equation?
ELBAGIR: Well, President Kenyatta has said that he knows the nation is waiting for answers and they're working as hard as they can to give them. And we know that they are -- they're assuming cooperation from Israeli special forces, from the FBI and from the London Metropolitan Police service.
So hopefully that will speed up this investigation. But it's interesting that you should mention the airport, because that had quite a big impact on the Kenyan shilling and it almost -- the focus has shifted obviously because of this horrific tragedy from the demand for answers into how that could have been allowed to happen.
And so it really feels like President Kenyatta, the stakes are kind of stacking up higher and higher in terms of convincing outside investors, convincing Western allies and also convincing Kenyans that he has his hands firmly on the reins. President Kenyatta, horrifically, has also suffered a loss in this. His nephew and his nephew's fiancee were among those killed.
And the fact that he's been able to carry on and continue to stand so firm and actually to strike such a conciliatory tone, that's won him a lot of -- that's won him a lot of credit amongst the Kenyans who really look to him for leadership (inaudible) felt that they received it. So I think that is actually balancing in his favor.
But you're right. Further down the line, eventually questions are going to have to be answered, Richard.
QUEST: Nima Elbagir in Nairobi for us tonight, we thank you for that.
Now when we come back, the long-distance relationship between Chrysler and Fiat, it could be fizzling . Chrysler's ready to embrace outside investors. But at least some in Chrysler are waiting for that. Fiat's reconsidering its future. And you might well ask, how did it all get so horrible? After the break.
QUEST: What a mess. Fiat is reconsidering its relationship with Chrysler. It's like a spurned suitor and it's looking on jealously as the U.S. automaker prepares for an initial public offering, an IPO. There are the facts, and you'll really wonder how we got to this sorry state of affairs.
The shares for the IPO are being issued by a workers' trust which is owned 41.5 percent of Fiat. (Inaudible). Now Fiat wants a full merger and owns 58.5 percent. The CEO, Marchionne, Sergio Marchionne, couldn't agree terms for the workers' trust's state.
So now reconsidering terms for the future, technology and design, and the sharing, putting this bluntly, you have the workers who own one stake; Fiat owns the larger stake. They can't agree to merge. So this lot are going to sell themselves off. Now Chrysler sales have rebounded to the 2009 bankruptcy. It's reported double-digit increases for sales in August.
CNNMoney markets writer Maureen Farrell is with me.
Am I being too harsh when I sort of say what a mess?
MAUREEN FARRELL, CNNMONEY MARKETS WRITER: No, you put it very well. It's a crazy situation. I mean, Fiat came in; they basically saved Chrysler. People didn't even think it was going to make it. The U.S. government was questioning whether it was going to make it.
Now Chrysler, oddly enough, is saving Fiat. It's the money maker; it's very profitable. Fiat is struggling. But there's this huge issue between the auto workers --
QUEST: But why won't the auto workers agree to a full merger?
FARRELL: Because they want more money for their stake. And Fiat doesn't want to give them. They're a few billion dollars apart. So that's what this is a bargaining game, this IPO.
QUEST: And when the -- I mean, it's unusual that a minority shareholder, albeit 41 percent minority, has the power to get an IPO done. How does that happen?
FARRELL: It's that they're both pushing each other's backs against the wall. I mean, they want to go public right now --
QUEST: (Inaudible) but why hasn't Fiat -- since it's got the majority stake -- just voted against it and stopped it? Or do they not have the power to do that?
FARRELL: They don't have the power to do that. They had to take it before a judge. A judge was leaning towards their valuation, but the judge pushed them towards this IPO. They didn't have the option, despite the fact that they have control. The auto workers still have a -- can block --
QUEST: So if this IPO of the workers' stake goes ahead, you would half or 48 percent of the company being owned in the general market and the rest of it still being owned by Fiat?
FARRELL: Yes, exactly. And it's kind of a crazy situation because Fiat wants the stake to be valued lower, because if they ultimately want to buy it and control the whole company, they want to buy it for less money. The auto workers want as much as possible. So they're really at crosshairs.
QUEST: I'm going to ask you the question I often come to you with: how's this going to play out? How does it end? Come on; I always put you on the spot. And you always play charitably --
FARRELL: I think it's going to go right till the end. I mean, we might even see a pricing of it. But I think they're going to get it worked out before you and I can go out and buy shares of Chrysler on the general market. I think it's going to go down to the wire but ultimately I think they're going to reach a deal, because it makes sense for Fiat to do that.
QUEST: And it was, of course, the former head of Fiat who famously said, Lee Iacocca, the famous quote of Lee Iacocca, "Lead, follow or get out of the way."
FARRELL: Thank you.
QUEST: Good to see you. Many thanks.
Now Airbus says more than 29,000 new aircraft will be needed in the next two decades to cope with an increased global air traffic. Look how much they say. Airbus says air passengers forecasts in 2013, 2.9; 2032, out to 6.7 billion. The planemaker demands will largely be driven by air travel, and that of course is mainly in Asia.
Airbus was predicting global passengers will more than double over the next 20 years and forecast by then, by 2032, two-thirds of the population in emerging markets will take one flight a year.
So the Airbus chief operating officer, a man who sells the plane, is John Leahy. And he sat down with Nina dos Santos in London.
JOHN LEAHY, COO, AIRBUS: There's a reason that there are only two major manufacturers in the world today, Airbus and Boeing, building aircraft, 100 seats and above.
It is difficult to do because you don't just need to get the airplane into the air; you have to get within fractions of a percent of the fuel burn predictions, the range, the weights that you've been promising people. And then you've got to do one other thing: you've got to build it reliably. And when it gets into service, it's got to fly with 99.5 percent dispatch reliability.
NINA DOS SANTOS, CNN HOST: I'm glad you mentioned those two issues. Let's start out with fuel. Obviously the situation in Syria has led to another spike in the fuel prices. This means that fuel efficiency is paramount.
LEAHY: Absolutely. And that's why we're bringing out our A320 family -- that's our single L family -- in the new version, the NEO, New Engine Option. It takes the proven reliability and fuel efficiency of an A320 and it reduces that fuel burn by over 15 percent. When fuel prices go up, it's a bit of a two-edged sword.
Yes, the airlines maybe aren't making as much as money, but it drives the need to replace that older kit with new aircraft, you know, to the fore.
DOS SANTOS: A380, is that still the answer to the capacity constraints that we're seeing, particularly in this part of the world?
LEAHY: Absolutely. I'm going out after we finish this interview to Heathrow to get on an airplane -- and you think about that, air traffic doubles in 15 years.
I'm going to look around Heathrow and say, how can we get twice as many airplanes in here? You can't. You can't get 20 percent more airplanes at the Heathrow. In fact, you probably can't get 10 percent more in. They're using it to maximum capacity.
So what do you do? It has to be bigger aircraft. It has to be.
DOS SANTOS: We're seeing all the catastrophes surrounding Boeing's problems with the Dreamliner 787.
From an industry perspective, what lessons can be learned?
LEAHY: Well, what you have to do is get it right the first time. And the airlines get very frustrated if you bring them new technology product but the reliability is not there. We're watching the mistakes they're making and hopefully we're not going to make some of the same ones. We had our own mistakes with the A380 program. We stumbled a bit with the reliability at the beginning with that.
We've got that fixed now and we're going to great pains right now with our A350 program to make sure it's mature on day one when we deliver at the end of next year. The airlines are unanimous in saying it's not just the numbers in terms of performance; it's the numbers in terms of reliability. We can't afford an airplane that takes five years to get mature in the field.
QUEST: That's John Leahy of Airbus.
We're still keeping an eye on the United Nations. The Liberian president is speaking currently at the podium at the U.N. When he has finished, it will -- when she's -- forgive me -- when she's finished, it will be the president from Iran, President Rouhani, who will be speaking. And there you see the picture of the Liberian president, of course, she's speaking at the United Nations at the moment.
Jenny Harrison is at the World Weather Center. Good afternoon, Jenny.
JENNY HARRISON, CNN METEOROLOGIST: Good afternoon to you, Richard. I'm going to start with weather conditions in Europe and a very mild evening it is as well. Let me start straightaway with those temperatures. Let's have a look at what is going on.
Look at this, 15 Celsius in Paris, 16 in London. In fact, that has just dropped by a couple of degrees. And it's because of that high pressure in control. We've got low pressure just sitting out there across in the Atlantic. It really is not moving at all. It's just sitting and spinning, producing those rain showers, producing quite a bit of moisture.
In fact, there's some warnings of fog across certain sections of the U.K., the rain not making too much headway you can see in the last few hours across the west because of high pressure.
And then if we move things forward, you can see that we've got more of that cool, chilly air with some rain across northern and eastern sections, high pressure across the south, nice and warm. And that is where that warm air is spreading up towards the west. Remember, of course Oktoberfest is continuing.
Bit of a mixture of weather over the next few days, Wednesday promises to be a little bit cloudy and foggy at times. We've got quite a bit of cloud Thursday and Friday, keeping those temperatures on the low side. But it's not like that everywhere in Europe, because look at these temperatures.
We've got Paris, the temperatures in the mid-20s and London as well above average, into the low 20s, but even so not bad for this time of year. A little bit cooler, though, certainly in Berlin for the next few days and much of Germany as well, telling the same sort of tale.
We've got quite an unsettled picture generally across more central and eastern areas, following the flow of that cooler air and then across the south. That is where the best weather is. As for temperatures across Europe, 24 in Paris. You saw that; 25 in Rome and 28 in Athens.
Now it's that time of year when the leaves are beginning to change color. It can be some very nice weather if you're heading out and about. And certainly in the U.S., it's all about the fall foliage, just a quick look there, September on through late October. I will talk about this more in the days to come, Richard, back to you.
QUEST: I'm going to want a regular foliage forecast from you, because I'm a great leaf peeker.
HARRISON: Well, you're in the right part of the country there, Richard. You need to pop it to New England one weekend and make the most of it.
QUEST: I want to know where my peeking of leaves should be.
All right. Jenny Harrison at the World Weather Center.
Now the United Nations, the Liberian president is still speaking at the U.N. She will finish and when she is over and finished her address, it will be President Rouhani of Iran.
In many ways, that is the event everyone's waiting for this year. This is QUEST MEANS BUSINESS.
QUEST: The Iranian president, Hassan Rouhani, is about to speak at the United Nations. Isha Sesay is in New York at the U.N., joins me now.
ISHA SESAY, CNN HOST: Hi there, Richard, yes; great anticipation for this speech by Iran's new president. This is effectively his global debut. We've been paying very close attention to the signals coming from Iran in recent days. There has been that "Washington Post" op-ed penned by the new president, in which he really expressed a desire to reengage with the international community.
And very interestingly enough, said he desired to move beyond impasses, whether in relation to Syria, his country's nuclear program or its relations with the U.S., words that have really led many to speculate as to what Iran is willing to do to really get that relationship restarted.
There had been this expectation that with this -- these positive statements there might be some kind of face-to-face meeting with U.S. President Barack Obama here at the United Nations today. That meeting never took place. We waiting to see whether they would meet at the head of -- the heads of state luncheon, which took place after the morning session.
Richard, they did not get together. In fact, Hassan Rouhani was not even present at that gathering. So now we stand by and wait to see what this new president will say to the general assembly. We'll be looking at the substance of his comments, but also the tone.
Richard, you're all too aware, as are many of us that have covered the U.N. General Assembly for many years, that in the past, when the likes of Mahmoud Ahmadinejad had been at the helm, these speeches have been very, very fiery.
Ahmadinejad used that podium to denounce the United States, to denounce Israel and generally just really strike a tone that was very much antagonistic to the rest of the world. And as a result, we would see members of foreign delegations walk out during those Ahmadinejad speeches.
So what will happen now? What will be the tone? What will be the message of Hassan Rouhani's speech to the general assembly, very much a headline from this first day of the general debate.
Right now at the podium is Liberia's president, Ellen Johnson Sirleaf. After her will come Hassan Rouhani; CNN, of course, will bring that speech to all our viewers live and will carefully analyze it when he is complete, Richard.
QUEST: Thank you, Isha Sesay at the United Nations, over on the east side of Manhattan. We'll be back after the break.
QUEST: We are awaiting the president of Iran to start speaking at the United Nations General Assembly. The basis for a meaningful agreement, those are the words you probably thought you'd never hear from the President of the United States about Iran.
Today, though, at the G.A., President Obama endorsed a potential diplomatic solution to Iran's nuclear program. The president said Iran's economy would benefit directly from cooperation with the West.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So while the status quo will only deepen Iran's isolation, Iran's genuine commitment to go down a different path will be good for the region and the world and will help the Iranian people meet their extraordinary potential, in commerce and culture, in science and education.
(END VIDEO CLIP)
QUEST: So the President of the United States has spoken. Currently at the United Nations, it's the president of Liberia who's addressing the general assembly and according to the schedule, after she has finished, it will be President Rouhani of Iran.
Everybody will be watching and listening to see whether or not he accepts the sort of olive branch that he's been given and how far he goes in moving in that direction. And even though an expected meeting between Obama and Rouhani did not take place, well, nonetheless, what's going to happen in the next hour or two, it's historic indeed.
And that's QUEST MEANS BUSINESS. I'm Richard Quest. Because the news never stops, neither do we. "CNN NEWSROOM" is next.