Dr. Anthony Fauci Questions The Health Cost Of Reopening; Amazon; The Retail Giant's Working Practices Criticized By A Resigning Employee; The CEO Of Slack Tells Staff, We Won't Rush Back, See You In September.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know. Paying the price. Dr. Anthony Fauci questions the health cost of reopening. Bye Amazon. The retail giant's working practices criticized by a resigning employee. And see you in September. The CEO of Slack tells staff, we won't rush back. It's Tuesday. Let's make a move. Welcome once again to FIRST MOVE. Great to be with you this Tuesday where we're very focused on FIRST MOVE to reopen global economies including positive signs and the challenges, too. Firstly, a shot of coffee here in the United States from Starbucks who say 85 percent of their stores will be back in action within days. Meanwhile, the world's fifth largest economy, California will allow some stores to open by the end of this week; and in New York State, they may start easing some measures and allow some reopening as of next Friday, too. For some of us, it comes as a relief after weeks of lock down as the economic cost mount, too; for others, it is a reason to be afraid. Reopening comes with renewed health risks and the number of U.S. COVID-19 cases has only plateaued, it's not come down. Investors though showing relief today, comforted, I think also by reports that U.S. Intelligence allies are playing down concerns that COVID-19 came from a lab in Wuhan. The hope, of course, being that it might reduce the risk of future punishment on China over the pandemic. European stocks, meanwhile, benefiting from a reduction in restrictions and recovery hopes in Europe, too. Oil giant, Total meanwhile being rewarded for maintaining its dividend. If you remember last week, competitor, Royal Dutch Shell cut their dividend for the first time since the Second World War. To Asia now and a quick look of what we're seeing there, I have to tell you, most markets were closed for a holiday. Hong Kong shares though gaining on news that gyms, cinemas and beauty parlors can now reopen there. Fingers crossed that where nations in Asia in particular, others will be able to follow safely. Let's get to the drivers on that point. So, how soon is too soon when it comes to reopening economies? The top U.S. Infectious Diseases expert, Dr. Anthony Fauci put it like this.</s>DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: It's the balance of something that's a very difficult choice, like how many deaths and how much suffering are you willing to accept, to get back to what you want to be some form of normality sooner rather than later?</s>CHATTERLEY: Christine Roman's joins me now. Christine, some might argue when you're talking about the cost being human life, there's no acceptable risk here. But I'm actually quite surprised that it's taken this long for states to start reopening measures given the sheer economic damage that we've seen.</s>CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: And you know, I think that people have been pretty disciplined overall as well, right, that for these weeks, people have really maintained their physical distance. They have stayed away from their workplace or their workplaces sent them home and they've really been working hard to try to do their part for the better of everybody. Right? But now, we are seeing this thawing of this freeze in activity, of careful thawing. You've got Macy's opening some stores this week, Simon Property is a big mall operator in the U.S. opening in several states. You're going to see peeking out, consumers peeking out and deciding if they're really ready to go back to normal and I don't think they are.</s>CHATTERLEY: Yes, I mean, this was highlighted in an Edelman Trust Survey that said -- and it looked around the world actually, but it looked at the United States in particular, and it said two thirds of people here are frightened that we're moving too quickly to reopen. In my mind to some degree, I think that's a good thing if it keeps us cautious. It keeps people wearing masks, it keeps them washing their hands. But at the same time, Christine, as you and I discuss confidence.</s>ROMANS: Right.</s>CHATTERLEY: Consumer confidence is everything.</s>ROMANS: And I think companies know that, right? For example, Macy's is opening up stores. Its executive say there's no playbook for this. But there will be social distancing. There will be markings in these stores to show how far people should be staying away from each other. There will be no more ear piercings or you know, having somebody touch your face when you're going to the makeup counter. They know that the American public, the global public probably is not ready for that yet. And so they're going to have to tweak their playbooks with that consumer confidence in mind. When the consumer feels safe, and the consumer feels secure, that's when the consumer spends again.</s>CHATTERLEY: This is interesting. So, you think actually from a business perspective, you almost have to be too careful, too protective of workers, and then you take the responsibility and reassure customers.</s>ROMANS: I think that if people -- look, I think people know that the new normal will not be like what it was in February. I mean, that's gone for now. So, how are we going to adapt? There's a lot of talk about restaurants moving outside of my town, for example. They're talking about closing streets and moving restaurant tables outside for the summer. And I think that you're going to be more likely to see people going back to restaurants, if there's a big distance between them, you know, contactless payments and the like, and you see business owners starting to talk about how they can transform their business for the cautious consumer to make the cautious consumer feel safe and secure, and then that will be the path back to a healthy and normal economy again.</s>CHATTERLEY: Yes, it's just going to take time and for the travels, the tourism globally, this is -- yes, devastating. Christine Romans, thank you so much for that. Coming up in the show, we're going to be speaking to the Slack CEO. His message, as I mentioned at the top of the show was, we're not coming back to work until at least September. We'll talk about the psychology of that decision for workers and what led him to that. In the meantime, Intelligence shared by U.S. allies suggest that coronavirus is highly unlikely to have escaped from the Wuhan's Institute of Virology. A Five Eyes report contradicts claims made by the U.S. President Donald Trump and his Secretary of State. David Culver is in Shanghai for us. David, it's interesting because this is what of course the Chinese have argued the whole way along, look, you're getting this wrong. You're accusing us of the wrong things. They fought back. Important, if we look at the economics here and the fears that perhaps this could result in an escalation of trade tensions at particularly the wrong time for both nations and the world.</s>DAVID CULVER, CNN CORRESPONDENT: You're right, Julia. Trade tensions would be one part that could escalate here. In fact, even state media today suggesting in an editorial that maybe they put off discussions for a Phase 2 trade talk. Of course, Phase 1 was signed in mid-January just before this outbreak, but that would push things back further, and it would do damage to President Trump politically. So, that's something they floated around. But the other reality here is that this could lead to not just a trade war conflict, but an actual war conflict. And I say that based on a lot of the rising concerns that tensions here are increasing between the U.S. and China. Now, I want to go to that Intelligence report that you mentioned. It's the Five Eyes Intelligence Sharing Coalition. It's between the U.S., Canada, the U.K., Australia and New Zealand and essentially this suggests that it is highly unlikely that that virus started in a lab, in the Wuhan Institute of Virology, which we traveled to just a couple of weeks ago. Instead, they say it's more likely that this was an animal to human transmission, and it happened at the market as was initially suggested by Chinese scientists. That's what they're assessing as of now. Of course, it contradicts directly what President Trump has said and what Secretary of State Mike Pompeo has been saying. And on that point, state media has been fueled once again to continue their attacks against the U.S., not calling out President Trump. They always avoid that strategically, and President Trump likewise avoids criticizing President Xi Jinping. However, they go right after Secretary of State Mike Pompeo, and they are continuing that rhetoric. And today, CCTV, the state-run broadcaster during their evening flagship broadcast suggested that the world should investigate the U.S. for what they allege to be its mishandling of this virus -- Julia.</s>CHATTERLEY: A thing to watch the politics here, the messaging which we know for actually both of these leaders domestically and internationally is very important. There was also this report from Reuters suggesting that China is gathering intelligence of what their perception is around the world, and they're about as unpopular at this moment as the perception of China if you go back to the late 1980s in the Tiananmen Square tragedy. David, what does that mean for Xi Jinping and messaging internally in China?</s>CULVER: Oh, I think this is really a rattling and worrisome report to come out. I mean, this suggests that this report showing the anti-China global sentiment, as they've characterize it, you know, worse than more than 30 years, went all the way to the top, went to President Xi Jinping, so, he is aware of that, and they look at the worst case scenario being armed conflict. So, it really does bring these echoes now of a U.S. Soviet Cold War era, and that's what is seeming to be suggested here as they put forward, you know this idea that perhaps the world is turning against China and that's the real concern that the Chinese are facing. And it's combined, Julia, with what we're seeing as a rising nationalism. So, the climate is very, very susceptible to falling into this if this war of words fuels emotions, which in turn could become action -- Julia.</s>CHATTERLEY: Yes, an incredibly dangerous point in time. I think it's masked with domestic issues, be the economic and fighting the virus, but the geopolitical undercurrents here and really quite frightening. David Culver, always great to have you on the show. Thank you.</s>CULVER: Thanks, Julia.</s>CHATTERLEY: Meanwhile, here in the United States, the Vice President at Amazon resigns because the company fired staff who raised safety concerns. Tim Bray was a senior engineer in Cloud computing. He says, "I quit in dismay at Amazon's firing whistleblowers who were making noise about warehouse employees frightened of COVID-19." Clare Sebastian has more on this. Clare, this is the allegation coming from a former employee, a gentleman who resigned on Friday. What more do we know about the allegations that he is making here? And what is Amazon saying?</s>CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Amazon is not saying anything yet, Julia. They haven't commented on this gentleman, Tim Bray's departure. He was a high ranking executive, the highest ranking, so far to speak out on these issues. Now, none of the cases that he talks about were new. We knew about several warehouse workers who were fired who had spoken out. We knew about a couple of corporate employees who tried to help the warehouse workers who spoke out, but Tim Bray, for him, he had been concerned about how the company treats its employees since last year, since employees started organizing to push for Amazon to take greater leadership when it came to climate change. He was one of those employees pushing. He said and we know there were reports at the time of employees who were within that group being threatened with dismissal. But he says that the COVID-19 situation and what he sees as retaliation against workers who spoke out really was the tipping point. This is what he said. Here is a quote from him. He says, "It's evidence of a vein of toxicity running through the company culture. I choose neither to serve nor drink that poison." He says that he escalated his concerns within the company, but it got to the point where he felt that by staying on as a Vice President within the company, he was endorsing these concerns -- Julia.</s>CHATTERLEY: This is a huge challenge for a company that's on the frontlines, providing essential services to people that are stuck at home ordering. They have thousands of workers they've hired -- what -- 175,000 people to try and cope with the demand. In the past, they've said look, we do not condone in any form attacking whistleblowers. But at the same time, if you're behaving badly as an employee, we reserve the right to challenge that. They find themselves under immense scrutiny at an incredibly difficult time.</s>SEBASTIAN: Yes.</s>CHATTERLEY: It's a tough moment, whichever way you look at this.</s>SEBASTIAN: It's really tough, and I thought it was super interesting because, you know, in the past, Amazon has said, for example, in the case of Chris Smalls now, a fairly high profile figure who was an employee in a warehouse in Staten Island who was fired back in March. The company said that, you know, while they support the rights of employees to criticize workplace conditions, that doesn't come with blanket immunity. He, according to the company, was fired because of violating social distancing rules. But this is what was really interesting, Tim Bray says that he believes both things are true. The complaints of the warehouse workers and the statements from Amazon that showed just how much they're spending, how much they're investing on safety. For example, we just heard the company is basically plowing everything it's going to make in the second quarter back into safety measures, to higher wages for workers and things like that. But this is what he says about that. He says, "The big problem isn't the specifics of the COVID-19 response, it is that Amazon treats the humans in the warehouses as fungible units of pick and pack potential." He says, that's not just Amazon. That's capitalism in general. But I think the question here, Julia, is that yes, Amazon is going to emerge from this with greater market share, but it will also -- it's looking increasingly likely emerge with even greater questions around its treatment of employees. We know the New York Attorney General, for example, is looking at this.</s>CHATTERLEY: Yes. Time to bring in monitors, I think. Part of being an essential business and I'd argue the government should be helping with this, too. But that's a whole different story. Clare Sebastian, great to have you with us. Thank you. Saudi Arabia, meanwhile, I'm having a major rethink on investment following the collapse of its oil income and of course, the coronavirus pandemic. Although oil prices are off the lows, the world's largest exporter is set to slash spending -- one of the world's largest exporters. Let's not forget the United States. John Defterios has all the details on this. John, when I saw these numbers and these measures, I was completely astonished at the measures that they're taking. They chose to engage in a price war and oh boy, now people are paying the price. Talk us through some of the details.</s>JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, the narrative certainly has changed even from Saudi Arabia in the last 10 days, Julia, and now the announcements are coming fast and furious.</s>DEFTERIOS: I think this is the key number, if we can put it up on the screen here. This is net foreign assets being held by the Central Bank at $465 billion. The problem is this key threshold is a half a trillion dollars. But if you go back to 2014, that was $750 billion dollars. So, that is cash burn in a period of six years and the lowest level since 2011. And this prompted the very respected Minister of Finance Mohammed Al-Jadaan in an interview over the weekend with an Arabic broadcaster to say that everything is on the table all of a sudden, and we will cut, it will be painful except for critical needs of the citizens. So, that sounds rather dramatic and it brings into question the 2030 plan for the Crown Prince, Mohammed bin Salman who is the son of the King, the neon futuristic city, what happens? The big tourist destinations in the mountains? The Red Sea Island resorts? This is all on the drawing board at this stage. The announcements aren't formalized, but you get the message. They are starting to retrench. SABIC, one of the biggest chemical makers in the world reported first quarter loss of $253 million, and that was before the coronavirus really set in said it is cutting all CapEx going forward unless it's essential. And then finally, late night last night, we heard word through a Ministerial Decree that private sector companies can cut salaries by 40 percent. That's extremely unusual because of the Saudi penetration in the private sector. Secondarily, if the pandemic continues for six months, they can lay them off. So, this is an oil crisis. And one would say on the positive side, this Crown Prince is not waiting. They're taking measures now to get ahead of the curve. But it almost sounds like a hint of panic, if you will -- Julia.</s>CHATTERLEY: I was about to say that, John. I was about to say how did these kind of measures resonate domestically, and particularly for one, their handling of a crisis, but what we've seen in the ensuing three to four months in terms of the Crown Prince, what does this mean socially and domestically and perception of leadership?</s>DEFTERIOS: Well, he has the support at this stage, of course, as the Crown Prince, his father is the King. He has this roadmap to go forward. The challenge has been the level of spending and the lack of foreign direct investment, and then you have a price war, and then this oil crisis. So, clearly he needs to get that all shored up. Again, the Finance Minister was very direct with the language. Now, you have another benefit here, Julia. Saudi Arabia has some 30 million citizens so the job is tougher. You have states like the UAE, Kuwait, Qatar -- all slowing down, but their sovereign wealth is over $2 trillion. Now, the next level is the bigger states like in Egypt that has a population of 90 million consumers saw the worst PMI figures on record dropping to 29. So, they did all these reforms in 2019 with the International Monetary Fund, devalued the currency, stabilized the economy, and lo and behold, the Black Swan did arrive here. So, these are some of the major challenges in the Middle East. And all of these states are dependent on higher oil prices. Finally, the silver lining, if you will, UBS was saying, today, by the end of the year, we could see a rebalancing of the market, oil at $43.00 by the end of the year, averaging $55.00 in 2021. It even prompted a tweet from President Trump in the last half hour saying, I like the fact that the demand is rising, so to our oil prices. He doesn't want it too hot, not too cold, but clearly north of $30.00 a barrel is much better than where we are today.</s>CHATTERLEY: Yes, but it's just one crisis that we're dealing with at this moment, and the broader concerns about demand in COVID-19 or another. When the likes of Saudi Arabia has to put a statement out saying it wants to maintain its peg against the U.S. dollar and not de-peg and allow the currency to weaken, you know there are challenges in this region. I think that was one of my big takeaways hereto. John Defterios, thank you so much for that. We'll keep an eye on some of these measures.</s>DEFTERIOS: You bet.</s>CHATTERLEY: Great. Thank you. Coming up, after the break here on the FIRST MOVE, exclusive access inside the German airline, Lufthansa as it seeks for a bailout. And later in the show, as I mentioned already, the CEO of so-called e-mail killer, Slack, tells me why companies need to throw everything at communications at this moment. Stay with us, we're back after this.