Interview with Dennis Woodside; America's Return to Prosperity
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN. And on this network, the news always comes first. Iran's new president wants to mend -- mediate an end to Syria's civil war. Hassan Rouhani made the offer in a column in "The Washington Post." It follows Iran's recent overtures toward the West. Mr. Rouhani heads to the U.N. General Assembly in New York next week. At least 18 soldiers and eight police officers were killed in Southern Yemen early this morning. Car bombs and heavy artillery were used to attack military and police installations. There's been no claim of responsibility, though Yemen's Defense Ministry suspects al Qaeda to be responsible. Chicago's police superintendent is calling for a ban on assault weapons in the United States after a shooting in a city park which wounded 13 people. The condition of one victim, a 3-year-old boy, has stabilized after he was shot in the ear. Police say the shooting is gang-related. BlackBerry has announced it's cutting about 40 percent of its global workforce. The phone maker also said it was expecting a loss of almost a billion dollars for the second quarter of this year. The shares plummeted more than 20 percent after briefly being halted following the announcement. The U.S. House of Representatives has taken America one step closer to a federal government shutdown. The Republican-led House passed a defiant short-term spending plan which would take away all the funds from the president's ObamaCare. Needless to say, that is unacceptable to the Democratic-led Senate, where it goes next. So the plan, as they say, is almost certain to be DOA -- dead on arrival. The stalemate over the budget is an urgent problem, as you heard Nedton Chiefs (ph) talking about on this program, because without the ability to spend, services will have to shut down in less than two weeks. President Obama put some physical distance between himself and Washington today. He hit the road for America's heartland, where the president took his economic message to Ford's new stamping plant in Liberty, Missouri.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We've worked with labor, we've worked with management. Everybody had to make some sacrifices. Everybody put some skin in the game. We bet on the American worker. We bet on you and today, that bet has paid off, because the American auto industry has come roaring back.</s>QUEST: It's not just auto manufacturing that's seeing a resurgence in America. In Texas, Motorola opened a new factory that provides final assembly for its latest smart phone, the Moto X, the first smart phone designed and engineered, assembled in the United States. Dennis Woodside is Motorola's chief executive. And last week, I asked him why bring assembly back to the higher cost United States.</s>DENNIS WOODSIDE, CHIEF EXECUTIVE, MOTOROLA: There are over 150 million mobile devices in the hands of Americans. And until now, not a single one of them has actually been made here. And when we looked at that, we realized that there were some assumptions that were made 10 years ago, when a lot of the consumer electronics moved offshore that just weren't true anymore. You can produce products here at a reasonable cost and with incredibly high quality. And we think, over time, we're going to be able to innovate much faster because our production is much closer to the engineers that build the products.</s>QUEST: Now, I -- I don't want to seem begrudging in this regard, but it is an assembly plant versus a manufacturing plant. And the critics and the naysayers will say, well, but they're not actually making them here. They're sort of making them where it's cheaper, bringing them back and window dressing by putting them together.</s>WOODSIDE: Well, that's completely not accurate. The way that we do things, as you can see behind me, there's over 2,000 people actually manufacturing, making phones here. There is a legal distinction between being able to say that something is completely manufactured in the U.S., which requires every single part to be made here, and assembled in the US. It's a lot like like the auto industry. If you go to an auto plant, the parts are coming in from all over the world. And that's true here, as well, some from the U.S. and some from outside the US. But the actual assembly of the product, the work that employs 2,000 people, that's taking place here. And we think that's important.</s>QUEST: You're involved in the single most competitive, I would venture to suggest, industries at the moment. Apple has just announced its new iPhone. Nokia now with Microsoft will be ramping up for Windows 8. So I ask you, sir, where do you see yourself fighting that competition now you're part of Google?</s>WOODSIDE: Well, this industry is driven by innovation. And if you just play the clock back five years ago, the players who were leading the industry at the time, that had the market share, were vastly different than the ones who are leading today. So we think we've built a product that's incredibly innovative. You can speak to the phone and it will make calls. It will navigate for you without you touching the phone. So it actually listens to your voice and the commands that you're giving it. You don't need to touch it.</s>QUEST: Motorola, one of the grandest names in mobile technology, the first phone I ever had, the Brick, was one of yours. So, what is it that people want for the future of mobile telephony? What is it we really want?</s>WOODSIDE: People want to participate in the design and manufacture of their products. They don't want the same thing that everybody else has. So the phone that we've built is manufacturable in 256 different combinations. You can actually customize your phone. So we think that has a long way to run. We also think there's a lot that's going to be done at lower price points. And we have a lot of work that's going to come to fruition over the next couple of months there, with products that are just far more affordable than what's out there today.</s>QUEST: Get back. No, keep away. We finally got one and everybody else wants to now have a play with it or make off with it. The iPhone faithful line up for Apple's latest offering around the world today. This is a real one, absolutely, from London to Tokyo to Sydney and in New York, they gathered, as they always do. Some have been cueing for days. Barking mad. Others have flown in from countries. And all for the new 5S and the cheaper iPhone 5C. Well, frankly, you couldn't get this one, but you could get the other one. There were those lining up to break the thing. Now, this is the first iPhone with fingerprint sensor technology. And there's been a variety of generous and varied bounty for those who manage to hack into it. So, first of all, on offer -- $16,000 in cash; there's bit coins of various values, a bottle of Makers Mark whiskey; a patent application. There are many other things amongst them, a dirty book of erotica. I'm not sure how much incentive that's adding to anything. But all of this is for the first person who manages to break the iPhone fingerprint technology. Some would say that's rather sick and sad, that you're having competitions to break something that's only just been created. The U.S. senator, Al Franken, isn't sold on the technology. He's written to the Apple chief raising his concerns. While hacked passwords can be changed, fingerprints cannot. And he wants to know more about that. All this week, we've been focusing on America's return to prosperity, America's return. On my road trip through the great state of Texas, the evidence was everywhere -- the car market that's revving up, the reviving oil and gas industry and there was plenty of just revving at the county fair. Without irony, they tell me they've never had it so good.</s>QUEST (voice-over): There are frightening rides and super-sized food. I have no idea how to eat this, but I suspect it's going to be very messy and a bevy of crushing bulls. They work long and hard in the oil and gas field. So tonight, Midland, Texas is ready to relax. A day at the fair -- it doesn't get much more Texas than this. You know the saying in Texas... What happens in Texas?</s>UNIDENTIFIED FEMALE: Everything is bigger. Evening is bigger.</s>QUEST: And that includes what goes on your head. So what hat was right for me?</s>UNIDENTIFIED FEMALE: So let's just...</s>QUEST: Ooh.</s>UNIDENTIFIED FEMALE: Now look. There is a cowboy for you. Square it to your face. There you go.</s>QUEST: How much of a noise do I need to make?</s>UNIDENTIFIED FEMALE: Heehaw.</s>QUEST: Try that again. Go on. Come on.</s>UNIDENTIFIED FEMALE: Heehaw.</s>QUEST: There's quite a bit of Wild West left in West Texas. Who are you?</s>UNIDENTIFIED MALE: Well, I'm the duke, of course.</s>QUEST: You're John Wayne?</s>UNIDENTIFIED MALE: Bigger than life, kid, bigger than life.</s>QUEST: Tell me what you're doing here.</s>UNIDENTIFIED MALE: Well, I'm just trying to spread a tradition -- rodeos and fairs are part of the American tradition, just as much as me.</s>QUEST: It doesn't get much more Texas than a man in a big hat who's about to do a bit of bull riding.</s>UNIDENTIFIED MALE: Yes, sir. Bull riding is great here this year.</s>QUEST: So these are your bulls? Which is the best? Which is the best bull there, come on?</s>UNIDENTIFIED MALE: The best bull, in my opinion, would be this black bull right here, 641 Revolution.</s>QUEST: He looks mean.</s>UNIDENTIFIED MALE: He's probably one of the easier ones in there to get along with.</s>QUEST: Probably? You bulls at the Midland Fair tonight seem easy to get along with. They they do bull riding isn't clear. The purpose is to hang on tight for eight long seconds. Only one, Guthrie Long (ph), could stay for that long duration. What's the moral of doing all of this?</s>UNIDENTIFIED MALE: To just have fun. I mean don't let anything bring you down, because it's going to -- it's going to cause problems in the long run. Just have fun and live life with a smile.</s>QUEST: In other words, seize the moment. And as you might say, take the bull by the horns.</s>QUEST: And so tonight's Profitable Moment. You can learn a lot about the state of the global finance from that trip to the county fair. For months, investors the world over have been on wild, scary rides as the Fed threatened to cut economic stimulus. The Fed put that off this week. The fun times at the fair may continue. Easy money will flow. And then smart investors will continue to climb the wall of worry. Tapering will come not this year, then surely next, as the economy strengthens slowly and steadily and reactions will be uncertain. And it's not just the Fed, of course, that will be doing this. Like all keen investors, this county fair gives a prominent place to Germany -- danke, Germany -- where they will be having an economic powerhouse with elections that take place this very weekend -- a more generous hand to the struggling Eurozone. Finally, like the children who bob up and down at the county fair, volatility could rule the day until we get clarity from the governments and central bank. And it all ends with the giant Ferris wheel, because the economy just keeps turning. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you on Monday.