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QUEST MEANS BUSINESS
Trump Meets with Lawmakers on Guns and Safety; UPS Shares Suffer 17% Fall During Volatile February; UPS CEO Says We are the E-Commerce Vendor of Choice. Aired 4-5p ET
Aired February 28, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] (CNN DOMESTIC SIMULCAST)
[16:06:46] RICHARD QUEST, CNN HOST: Good evening. There you have Donald Trump with leaders of both sides of the House and Senate in the White House
discussing the issue of gun control.
Good evening tonight. QUEST MEANS BUSINESS. We are in Louisville, Kentucky. We are at the UPS World Port. It's part of our plan every quarter
to take you inside one of the largest companies in America to show you the global economy in action and the issues that they are facing at the moment.
So here, for example, we are at UPS. Best described, perhaps, as the engine room of the global economy. And throughout the course of this program we're
going to show you exactly what that means in real terms. But of course, whilst we are here, we can't ignore that this company is also now enmeshed
in the debate that you've just been listening to at the White House. It is the debate, the very real debate over gun control in the United States.
You've just been listening to President Trump in a fascinating debate, debate, discussion, negotiation, call it what you will, with members of
Congress at the White House. Stephen Collinson is with me. Stephen, we saw this happen with tax reform. We've seen this happen elsewhere, I guess the
issue is have we just watched a negotiating session or nothing more than a talking shop?
STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: I think, Richard, what we've seen is basically a TV show which presents the President as somebody who is
working sincerely to get people together and come up with solutions. I mean, if you take that session at face value, we will see a comprehensive
gun bill with bans on assault weapons, no concealed carry, universal background checks, teachers armed in schools. He basically agreed with
pretty much everything anybody proposed in that session.
The question is does the president have a real understanding of the political dynamics of this? You know, that kind of bill has literally no
chance of passing through the Congress. So, the question you ask is either the president doesn't necessarily understand exactly what is doable or is
this just a show for the cameras to show he's leading and then when nothing happens he can turn around and say, look, I tried. You guys couldn't get it
QUEST: Steven, we saw exactly the same issue with DACA and immigration. And you'll remember, of course, the extraordinary session around the table
where the President appeared to contradict himself and change policy several times. But again, several weeks on, if not months on and nothing's
COLLINSON: Right, exactly. You'll remember that meeting about immigration. The President came out and said OK, I want a comprehensive immigration bill
which is a complete repudiation of the Republican position on all of this. It was very fascinating in that little tableau at the end there, you had
Democratic Senator Dianne Feinstein basically apparently getting an assurance from the President to get an assault weapons ban in this
comprehensive bill, which is completely against everything the Republican party stands for.
[16:10:00] You saw on the other side of the President, John Cornyn, the top Republican with almost mystification written across his face. So, what
happened in the immigration meeting was that in the subsequent hours and days the White House pretty much walked back everything the President had
said. And the President eventually repudiated what he said himself. So, that's the way it is with this president. Can anybody take any clear path
out of that meeting for legislation on gun control? I think it's very unlikely.
QUEST: Stephen Collinson, thank you very much, indeed.
Now, QUEST MEANS BUSINESS, of course, we put this into the business context and in many ways the debate on gun control in the United States is now
being framed through the lens of corporate America, if not exactly through gun owners. Take, for example, Dick's Sporting Goods which announced that
it was banning the sale of assault rifles or would no longer sell assault rifles. And was going to introduce a bevy of greater restrictions on gun
purchases. It's the first major move by such a company, and the chief executive explain why.
(BEGIN VIDEO CLIP)
EDWARD STACK, CEO, DICK'S SPORTING GOODS: We think it's the right move and whatever happens, we think this is the right move. It's the right thing to
do for these kids. It's the right thing to do for what's going on. And we hope that it spurs the conversation and brings people along to have a
serious conversation about what's happening in our schools and what gun violence and put a stop to it. I'm a gun owner myself. I'm a supporter of
the Second Amendment. I'm a gun owner myself. We have to do something about this. This is tragic what's going on and we're taking a stand.
(END VIDEO CLIP)
QUEST: Now we are getting a very real example of exactly that today. Here at UPS, United Parcel Service, and its archrival Federal Express or FedEx,
both engaged in a war of words over the relationship with the NRA, the National Rifle Association. FedEx has pointed the finger at UPS for having
a commercial contract with the NRA after FedEx was accused of -- criticized for not ending its preferential rates for NRA members.
When you put it all together, FedEx, discounts are for several small businesses, not NRA specifically and then it added the NRA online stores
uses UPS, not FedEx. UPS has replied, we've never sponsored or offered discounts to the NRA. We ship for anyone engaged in lawful conduct. David
Abney is with me, the chief executive of UPS. Good to see you, sir.
DAVID ABNEY, CEO, UPS: Thank you and welcome to our home.
QUEST: Thank you. We'll talk about UPS and all of these things in a moment, but first, this disagreement over guns and the transportation of guns or
doing business with the NRA, what are you saying here at UPS?
ABNEY: Well, first and most important is our thoughts and concerns are with the victims in these senseless tragedies, and that has to be first and
foremost. We encourage our government, both Congress and the President to look at the very real issues and what they need to do to solve those issues
so that we can avoid these instances in the future.
QUEST: Right. But you do have a commercial arrangement with the NRA like you do with other organizations.
ABNEY: You know, there's about 8 million locations where you pick up and deliver packages every day. This website with NRA is one of those. There
are subs in the other major integrators that also pick up and deliver from those locations. You have to remember, though, when you try to frame this
to this issue that this website is about t-shirts and caps and other branded items. This is not about the weapons that are being shipped out of
QUEST: So, what's happening? What's happened in the sense of you as a common carrier, as the debate goes on in the United States over gun
control, the NRA. What do you want to do? What do you see is the right thing for UPS to do?
ABNEY: Well, first and foremost, we are going to be a corporate citizen. We're going to follow the laws. We're going to be very sensitive to the
situations that are out there. In this case, we are a common carrier and we make sure we comply, we make sure we follow the law, but we are hopeful
that government will set whatever the policy needs to be. We really don't believe that we can set the policy for the country, but we certainly will
comply and enforce that policy.
[16:15:00] QUEST: Finally, on this area before we take a break and we'll come back and talk about your company. Do you find this one of the more
difficult areas as a chief executive where in this country, CEOs are very often, corporations having to be the moral compass on many issues?
ABNEY: Well, we take our responsibility -- we take this responsibility in a very sensitive way, and we do take it seriously, and we do believe that we
want to be good, corporate citizens, and I think we have a reputation of doing that and will continue to do it in this kind of situation.
QUEST: But no intention to stop transporting guns at the moment or dealing with the NRA?
ABNEY: No, we will follow the law and we will continue to do that, but we are encouraging the policies to be set in place to address these kinds of
issues going in the future.
QUEST: We have much more to talk about after the break, so don't go away. We need to know where you're taking UPS, particularly, are you afraid of
the big bad wolf, Amazon? After the break.
ABNEY: Thank you very much.
QUEST: We'll talk about it -- oops, look at that. I'll need a new one.
QUEST: Welcome back. It's QUEST MEANS BUSINESS live from the UPS World Port in Louisville, Kentucky. One of the wildest months in the stock market that
we have seen. The Dow has closed down more than 400 -- almost 400 points lower. It's a late session route. It's the worst February since 2009. U.S.
growth was revised downward from 2.5 percent just a tad from 2.6 percent. So, if you look down overall, the Dow is off roughly 2 percent for the
month of February, which when you considerate one point there was a 10 percent correction, it shows you that volatility that is now really quite
UPS' share price is down some 17 percent in February. The CEO, David Abney is with me. I mean, there's no justification, as such, for such a beating
up of your share prices or is there?
ABNEY: You know, with some of it obviously is about the market, what the market has done, what you just shared. You know, we reviewed on our last
quarter that we had strong top line growth. We also reviewed that we met consistence from an EPO standpoint. We have said that we're going to invest
and we're going to invest heavily in our network and we have to remember though, that we have industry-leading voice when we do that, so we're
investing for long-term value for our shareholders.
QUEST: I want to get into this now. Because the whole issue of UPS -- and you are the largest and you -- some 20 million parcels a day go through
your system, correct?
[16:20:00] ABNEY: That's right.
QUEST: But Amazon has said it's going to start getting into the shipping with Amazon business. And that took a knock for your share price and many
people suggest this could be a disruptor for you. Do you buy that?
ABNEY: You know, well I can't say for sure, what effect that had on the stock price. What I can say, Amazon is a customer of ours. We have a good
relationship. At the same time, we monitor what they and anyone else in our industry will do. Our focus is on what we do to bring value for our
customers and on the scale and on our capabilities and we're investing in our strategy to make us even stronger --
QUEST: Many have underestimated the Amazon effect, and I'll give you an example. I walked through the World Port the other night, and I see the
sheer number of parcels and packages that you're carrying -- for others as well -- but for Amazon. Now, if Amazon starts saying, well we think we can
do this. Slowly, but surely, we'll build up an infrastructure. Can they do it? Does that worry you?
ABNEY: You know, it does not worry me, and I cannot estimate what Amazon is going to do. What I can tell you is what we provide them and our other
customers, we are absolutely positioned as the e-commerce vendor of choice. And through all of the services that we provide, our access points, our
aircraft, our network, the technology, and --
QUEST: Delta Airlines are a noisy one. You were saying. With all of this.
ABNEY: Yes, so Amazon or any other large shipper with our density will have more density than they will have on their own. So, we believe we provide
them and our other shippers with a tremendous amount of value, that they couldn't do on their own.
QUEST: Taking the future, as to what you want -- you're UPS and you've got .5 million -- how many employees. You've got 100,000.
QUEST: 435,000 employees, 100,000 trucks and several hundred aircraft, how do you turn this into a nimble, disruptive company that can take advantage
of new opportunities and doesn't behave like the government?
ABNEY: You know, it is absolutely what I'm talking about with our management team as we speak. We call it going forward fast.
QUEST: How do you go forward fast with a company this big?
ABNEY: You cannot act like an incumbent. You've got to feel like if someone is going to try to disrupt the industry then we have to have that
mentality. So, we talk about, do we have to make decisions much quicker. We have to not have to try to protect the past and we can be proud of the
past. We have to embrace the future and the future is all about technology. It's our smart logistics network and how we interconnect with our
QUEST: On the question of the global economy, you are very big here. You've got a major center in Cologne. You have a major center in Shenzhen. Are you
worried at the level of protectionism that is now coming into the world? A level where -- we've seen it in rhetoric and we're starting to see it in
action. We're starting to see the scintilla that global trade could be threatened.
ABNEY: You know, at the same time that you do here all the rhetoric, global trade is expanding right now, and we see it as much more optimistic than
what we're hearing in the news. Now we are big believers in free trade. Everywhere we've seen the U.S. sign of free trade agreement, our business
which is reflective of our customers has increased 20 percent.
QUEST: So, I assume it was a disappointment that the U.S. backed out of TPP and you would urge the U.S. not to back out of NAFTA?
ABNEY: We are strongly urging the U.S., Canada and Mexico to find ways to have a win-win-win situation. It's a 25-year-old agreement. It needs to be
modernized and it does not need to be eliminated. Supply chains are just so interconnected between the three countries. And yes, we would have liked to
see TPP passed. There's no doubt about that. We still believe there's opportunities for additional agreements.
QUEST: I want to finish, since you've been very kind to give us a good dose of time. This -- I kind of keep coming back, David, to this idea of the
ABNEY: All right.
QUEST: The company that is this big. The man in brown. How do you do it? What do you envisage disruption looks like so that you don't find your core
business just eaten away by everybody else?
[16:25:00] ABNEY: Well, you have to embrace the future. You have to embrace the technology that did not exist in years past. We just formed an advanced
technology group that is focused on not what's going to happen the next two to three years, but much further down the road. We capture now 21 terabytes
of information that we have stored. How to take that information, integrate it with our customers' needs and be predictive in our analysis. Help them
to be more effective in their supply chains which we will get the benefit of that and that's what we're investing in.
QUEST: Good to see you, sir.
ABNEY: Thank you very much.
QUEST: Thank you very much for inviting us, allowing us and letting us take over this large part of the World Port.
ABNEY: Thank you.
QUEST: Thank you very much indeed.
As we continue, the Mayor of Louisville is going to tell us how important David and his company is. And we will also review exactly why this part of
America is so significant when it comes to communications and distribution. It's QUEST means business live at the World Port in Louisville.
QUEST: Hello. I'm Richard Quest live in Louisville. More QUEST MEANS BUSINESS in a moment after these news headlines.
President Trump has called for action as he met a bipartisan group of lawmakers at the White House on gun control. The President talked about the
need to harden schools and stressed importance of strengthening background checks.
The President of the United States is taking on his own attorney general. In a tweet he blamed Jeff Sessions who has recused himself from the Russia
investigation. The President called Sessions' approach to the alleged surveillance abuses disgraceful. Sessions responded in a statement saying
he would continue to discharge my duties with integrity and honor.
The British Prime Minister Theresa May has rejected the EU proposal to keep Northern Ireland as part of the customs union. The commission published the
draft agreement for Northern Ireland border earlier on Wednesday. The Prime Minister told Parliament agreeing to it would betray the Brexit vote of the
The Evangelist, Billy Graham is lying in honor at the U.S. Capitol. As many turn out to honor his legacy Wednesday, President Trump and members of
Congress paid their respects to the man known affectionately as America's pastor. Graham, retired last week at the age of 99, was only the fourth
American to lie in honor is a rare distinction.
[16:30:00] President Trump has told the U.S. lawmakers that the country needs a comprehensive bill on gun control, and what does that actually
mean? At the bipartisan meeting he wants stronger background checks. He wants a ban on bump stocks. And he wants to raise the age limit. Have a
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: -- consideration, and I'm the one bringing it up and a lot of people don't even want to bring it up
because they're afraid to bring it up. But you can't buy a handgun at 18, 19 and 20. You'll have to wait until you are 21. You can buy the gun, the
weapon used in this horrible shooting at 18.
The NRA is opposed to it, and I'm a fan of the NRA. I mean, there's no bigger fan. I am a big fan of the NRA. They want to do it. These are great
people. These are great patriots.
(END VIDEO CLIP)
QUEST: Jeremy Diamond is in Washington. Jeremy, what purpose did today serve?
JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Well, Richard, we saw the President there for more than an hour haggling with Republican and
Democratic lawmakers who gather here at the White House to address this problem of gun violence in America. And particularly this issue of school
safety and these school shootings that have ripped through the heart of America time and again over the last decades, really.
But the president at the end of this hour-long meeting, it was no clearer what specific pieces of legislation he would actually support. He did voice
his support for various proposals. Strengthening background checks. He mentioned this idea of raising the minimum age to purchase firearms, but it
wasn't clear what the specific parameters would be for those proposals. Of course, strengthening background checks could mean anything from minor
tweaks at the edges to something much more comprehensive into eliminating the loopholes that Democrats have been calling for four years now.
What was clear, though, is that the President was looking for some kind of a comprehensive solution, and omnibus bill, if you will, that would address
various components and various issues. Everything from mental health to background checks to perhaps this issue of raising the minimum age of
QUEST: All right, Jeremy. So far where does this go next? At the end of the day, I mean, just about everything that could be said on this subject has
been said by politicians and I don't see a legislature proposal on the table that stands a chance of passing.
DIAMOND: That's right. One of the proposals that has been floated over the years, and that is coming back up right now, is this bill proposed by
Senator Joe Manchin and Pat Toomey. The Manchin/Toomey bill which is a bipartisan bill to expand background checks. The President actually seemed
quite unfamiliar with this bill during this meeting even though it has been one of these proposals that has attracted some bipartisan support albeit
not enough over the years. The president did suggest that was a proposal he would support if it could have other things added on to it.
But again, this just speaks to the fact that the Congress is looking to the President for leadership. And while he is leading on the front of
encouraging this conversation and bringing the different ideas to the table, he has yet to actually signal what he would support even if it goes
against the NRA. And that was something that you could sense a lot of the lawmakers in the room today were looking for was for the President to say,
listen, I back this specific proposal even if it goes against the NRA, for example.
QUEST: Jeremy Diamond. Jeremy Diamond, thank you, and with that we will join our colleagues Jake Tapper.
(CNN DOMESTIC SIMULCAST)