Trump Warns GM as Ford Scraps Factory; Britain's EU Ambassador Quits in Surprise Move; Megyn Kelly Leaving Fox for NBC; Cantor Fitzgerald



Quits in Surprise Move; Megyn Kelly Leaving Fox for NBC; Cantor Fitzgerald

Hires Anshu Jain as President; Trump Adviser: Russia Involved in U.S.

Election Hack; Eurasia: World Enters Geopolitical Recession in 2017; - Part 1>

Raju, Nina Dos Santos, Brian Stelter >

warning to GM as Ford scraps a factory in Mexico. Britain's ambassador to

the European Union stages a one-man Brexit of his own. The tale of the Fox

and the peacock. Megyn Kelly jumps ship to NBC. Chief exec of Cantor

Fitzgerald brings in a big name to be its brand-new president from Duetsche

Bank. One of Trump's advisers says that he thinks Russia was involved in

the hacking. The Eurasia Group says it's not economic recession that

threatens the world in 2017, it's geopolitical recession. >

Government; Europe; Trade; Automotive Industry; Media; Megyn Kelly;>

[16:00:00] RICHARD QUEST, CNN ANCHOR: Now, hang on that's a new bell. Look the markets are 109, but look, we haven't seen that going around, whizzing like thingamajig gone berserk. But even so, the bell is ringing for the first trading day of the year. And -- oh, please. That was a very wimpy gavel to start trading on Tuesday. It is the 3rd of January.

Tonight, Donald Trump, the President-elect in the driving seat, sends a warning to GM as Ford scraps a factory in Mexico. Britain's ambassador to the European Union stages a one-man Brexit of his own. He's off. And the tale of the Fox and the peacock. Megyn Kelly jumps ship to NBC.

I'm Richard Quest. We have a very busy hour together, and I mean business.

Good evening from New York. Tonight, Donald Trump has taken on America's giant car companies in a battle royal. Ford says it is casting a vote of confidence in the President-elect. It's a vote worth some $700 million. Money that Ford now plans to invest in the United States, as the car company cancels plans to build a factory in Mexico. You're going to hear Mark Fields, the chief executive, on this program in just a moment.

But there are more cars. Hours earlier, General Motors faced a warning as the CEO, Mary Barra heard from Mr. Trump. That the President-elect would impose stiff tariffs on Barra's company for cars manufactured in Mexico, south of the border. Whichever way you look at it, the car companies have felt the wrath of the President-elect. For instance, GM'S Chevy Cruz. Now, it's manufactured at two plants. The hatchback is manufactured in Mexico. The sedan is manufactured in Ohio. Now, recently, general motors or GM cut 1,200 jobs, just around the time of the election in November. But Mr. Trump has named GM'S chief exec, Mary Barra, who you saw just then, to a panel on job creation.

Ford, however -- so you've got the GM story here, and this threat that if those cars aren't made there, then they'll face tariffs as they cross the border. Well, Ford has had similar threats made against it, so now Ford says it's creating 700 jobs in Flat Rock, Michigan, and it is canceling plans for a plant in San Luis Potosi, Mexico. Poppy Harlow has been speaking to Ford's chief executive. She is at the ford plant and joins me now.

So, GM is still feeling the wrath. Ford felt the presidential wrath before the election, has felt it since. We're going to hear, in your interview, but I need to know. How much of this was already a cake baked and Ford's just being clever about it?

POPPY HARLOW, CNN ANCHOR AND CORRESPONDENT: You know, Richard, it's a very good question. And good evening to you. I do not think that this is like some of the other instances we've seen, where Trump has taken credit for jobs coming to the U.S. that were already planned before his election. This is a stunning about-face by Ford that was very dedicated to this $1.6 billion plant in Mexico. Just a few months ago, the chief executive, Mark Fields, told me time and time again, we are a global company. This is a global business. Well, a very different tune from him today when I asked him, how much of this decision to scrap the plant in Mexico was because of the President-elect?


MARK FIELDS, CEO, FORD: Well, we make decisions like this as a company, we look at -- first, we do what's right for our business. This makes sense for our business, and we look at all factors, including what we view as a more positive U.S. manufacturing business environment, under President- elect Trump. And it's literally a vote of confidence around some of the pro-growth policies that he has been outlining. And that's why we're making this decision to invest here in the U.S. and in our plant here in Michigan.

HARLOW: What policies specifically? Because I know you've spoken with the President-elect about this decision today. Did he make promises to Ford? Things that he will do, that will make it beneficial to your business to stay here and cancel that Mexico plant?

FIELDS: This business decision was done independently, but we did speak to the president and the President-elect and the vice President-elect this morning.

[16:05:00] And this is really around making sure that as we make these decisions, that it is first right for our business to do this.

HARLOW: So, what will they do to make it right for your business. Because, Mark, you've told me it costs you 40 percent less to build these cars in Mexico.

FIELDS: We are really encouraged again, by the pro-growth policies that he's outlined, particularly around reforms, around tax policy and regulatory policy. Those types of things are, I think, are going to generate a very positive business environment investment here in the U.S.

HARLOW: Let's get specific on that. He wants to bring the corporate tax rate down to 15 percent. That helps you. What do you mean, regulatory? Are you talking about fuel efficiency standards?

FIELDS: Overall, fuel efficiency standards, but just overall regulatory burdens that are on businesses. And he has said very clearly, he wants to create a very positive business environment for businesses to invest in the U.S. and we'll have to see how that rolls out. But again, this is a vote of confidence that, you know, we feel very good about that kind of direction and in making these kind of investment decisions.

HARLOW: What did the President-elect say to you this morning? You called him, along with Bill Ford?

FIELDS: Well, we -- I talked to the vice President-elect this morning. He was very happy about the news. And that we were making the investments here in America, not only good for Ford, but good for the U.S. and American workers. Did not get a chance to talk to President-elect Trump. Bill Ford did that. He reiterated the same things.

HARLOW: Did he say he's going to stop with the tweets and the attacks against Ford?

FIELDS: I don't think we got to that level. He was just very appreciative for the announcements that we're making. Not only just here in the U.S., but the announcement that we're making to reinvest in our business around these seven electrified products to show that we're a leader in this area.

HARLOW: So, let's talk about the jobs, 2800 jobs were slated to be added in Mexico through this $1.6 billion plant that is now canceled. Instead of that, you're going to create 700 jobs here. Why not as many jobs here as you were going to create in Mexico?

FIELDS: First off, we have to understand the reason we are canceling our plant in Mexico, the main reason is because we're seeing a decline in demand for small vehicles here in North America. So as a company, we're always looking at our capacity and asking ourselves, where can we fully utilize it? Therefore, we're going to be producing the Focus at an existing plant in Mexico, so we don't have to build that new one and create those 2,800 jobs. And that's due to just as we see, demand for that segment of that type of vehicle.

HARLOW: It certainly has something to do with the fact that the President- elect has singled out Ford among automakers. Pretty much, he did tweet about GM today, but this is a trend we've seen. The President-elect calls out Carrier. He gets jobs to stay here. He calls out Boeing. He gets a cheaper Air Force One. He calls out Lockheed Martin, and they say, we're going to work with you. There's a concern among some, Mark, that this is, in essence, a form of crony capitalism that is dangerous to American democracy. That the president can cut deals with companies and then they expect favors from the administration in return.

FIELDS: First off, we didn't cut a deal with the President-elect. We did what's right for our business, first and foremost. That's what drives us in every business decision that we make. We look at a lot of factors, Poppy. One of the factors that we see is again, this more positive U.S. environment for manufacturing and investment here. And we take that into account in our investment decisions. Very clearly. And this is the same - - for any other country around the world.

HARLOW: Does it concern you that he's going after American companies? Not just as the head of Ford, just -- I mean, something we've never seen in an American president before?

FIELDS: We've always seen lots of opinions, whether it's politicians or others around businesses and the decisions that they take. And you know, in our job as a business is to make sure we're making the right decision for our business, for our shareholders. But also at the same time, we are a global, multi-national company. And we're very proud of that. But our home also is here in the United States. And it's really important that we're strong in the U.S. and that we invest in the U.S. and that's why we are the number one manufacturer of automotive vehicles here in the U.S. and we employ more hourly automotive workers than any in the U.S. This will help build on that going forward.

HARLOW: You said on CNN this fall, one of the things you would like to see from the administration is, as they review fuel economy standards, that mean that all the cars have to get more and more miles per gallon, that you would like to see those fuel economy standards more in line with market realities. More favorable to your business. What about the concern from some who might look at this and say, is this crony capitalism? They might get more favorable regulation on fuel economy standards, because they're bringing jobs home.

[16:10:00] FIELDS: Well, we have always been consistent on this issue. First and foremost, we are absolutely dedicated to improving the fuel economy of our vehicles. And we're a leader in many ways on that. And our point was around, when we agreed to the midterm -- the one national standard back in 2011, that set the fuel economy standards out to 2025. It was an unprecedented agreement. And as part of that agreement, there would be a midterm review in 2018, and we agreed that we would look at the assumptions back in 2011. A lot of those assumptions have changed, whether it's the price of a barrel of oil or a gallon of gas. A lot of changes and assumptions on adoption of new technologies. And we just wanted that to be a fact-based discussion in developing regulations.

HARLOW: So, to those critics you say --

FIELDS: To those critics, we say, first off as a company, we are very dedicated to improving fuel economy. But we just want it to be a fact- based discussion. And we want to make sure that we preserve vehicle affordability, customer choice, and American jobs.


HARLOW: Those American jobs, Richard Quest, cheered very loudly behind me here today, when the news was made at this Flat Rock assembly plant here in Michigan. I will tell you, the Mexican government tonight, not happy at all. Let me read you the statement they just issued. "They regret Ford Motor Company's decision to cancel the San Luis Potosi investment project and has ascertain that the company will reimburse any expenditure made by the state government to facilitate this investment." Richard?

QUEST: Poppy, what do you make of this? And, you know, I listened to Mark Fields. He is a CEO in a very difficult position. In the same ways that the chief exec of Boeing was and of Lockheed Martin, and Mary Barra now is in terms of Mexico.

HARLOW: I think that he is a chief executive, recognizing that this is an entirely new landscape that he and his competitors are operating in. I think he has decided that it makes business sense not to put $1.5 billion in Mexico to make small cars that aren't selling as well as they were a year ago. You know, Richard, we've seen a slowdown in auto sales. But I think he also knows that it makes a lot of political sense, given the fact that we'll likely have huge tax reform, which is going to mean low corporate tax rates for companies like Ford, to put these jobs here. I think that is the calculus that is made. It is part for the business and it is part political.

QUEST: Poppy Harlow, have a nice flight back to New York. Thank you. And bring that Mustang car, that looks rather nice, behind you. Too bad it's not in red. Bring one of those back with you. Thanks very much.

HARLOW: I will. I will.

QUEST: The President-elect is also setting the agenda for lawmakers in Washington at the other end of Pennsylvania Avenue. The new Congress was due to vote on a measure that would curb the powers of an independent ethics watchdog. It was the big story over the last 24 hours. Instead, the ethics watchdog will be under the control of lawmakers. A vote from the full House was scheduled this hour, but now Republicans have dropped the proposals during an emergency meeting.

Now, look, you and I do not need to get into the minutia of what this was all about and the ethics and the conflicts and all of that. We can leave that to others. What we feed to talk about is the turning point, the series of tweets from the President-elect. He tweeted this morning, "With all that Congress has to work on, do they really have to make the weakening of the Independent Ethics Watchdog, as unfair as it may be, their number one act and priority. Focus on tax reform, healthcare, and so many other things of far greater importance! #DTS." That stands, of course, for drain the swamp.

Manu Raju is with me on Capitol Hill. Which bit got the Republicans? Was it the fact he clearly thinks this isn't the necessary thing, the weakening of the ethics. In other words, he was in favor of leaving things as they are, or was it the mere fact he attacked them anyway?

MANU RAJU, CNN SENIOR POLITICAL REPORTER: I think it was the timing of him making these remarks, saying that he does not agree with the proposal. And it was the timing of moving forward with this idea to gut this ethics agency, as the first opening act of this new Congress, as they were planning to do a whole slew of things to implement Donald Trump's agenda. So, Richard, it was not just the pressure that Donald Trump levied by those tweets. It was also outrage from across the political spectrum. Members were saying they were getting tons of phone calls, flooded and flooded with angry constituents. They were getting bad headlines. And Donald Trump was essentially the straw that broke the camel's back.

QUEST: Now, I was reading in yesterday's "New York Times" a fascinating article, you will have seen it, that really says the Republicans' biggest problems are the Republicans in Congress.

[16:15:00] Now they all have the three branches of government. The House, the Senate, and the presidency. I mean, for goodness sake, Manu, they can't even get it right on day one, in a coordinated measure with the president. This does not bode well for discipline in Republican Congress.

RAJU: You know, the real challenge going forward is going to be to keep Republicans united, not just in the House, but more importantly, in the Senate. Because in the Senate, in order to get anything done, they're going to need not just Republican support, but Democratic support. And if Republicans start to fracture, it's going to get a lot -- it's going to be very hard to get the necessary votes to get Donald Trump's agenda through. That is going to be the hardest thing now going forward. Keeping the Republican Party united. It's going to be, especially when you start dealing with thorny issues like healthcare, tax reform, things that Donald Trump wants to get done. And they can't get this ethics issue right, it's going to be much harder on those bigger, weightier issues start coming down the pike in a matter of weeks.

QUEST: All right. So, finally, how on earth does this measure even get out of the starting gate, when the leadership didn't even know about it, let alone negotiations with the President-elect. Is it -- you know, to the old phrase, was it conspiracy or cock-up?

RAJU: There are two reasons. One, is that lot of members do not believe this ethics body has acted fairly. They believe it has overreached and they believe it has to be changed. Two, this happened behind closed doors. It happened in a secret ballot. That means members could vote however they want, privately, and no one will know how they actually voted. But the difference was, today the public vote was going to take place and a lot of members did not want to be on record after something had caused so much controversy in the last 24 hours.

QUEST: Manu, thank you. Hopefully you have no plans to see your friends or family over the next four years. Because something tells me you'll be doing duty for long hours. Thank you, sir.

RAJU: Absolutely. Thank you.

QUEST: Now, the newsletter, the QUEST MEANS BUSINESS newsletter, which is just being published at the moment. In it, I give a Profitable Moment on this very issue of Donald Trump's and his relationship to corporate America. Boeing, Lockheed Martin, what we heard today with Ford and with General Motors, playing Trump's game for now. Sign up, you go to It arrives as New York closes and it briefs you for day ahead.

Talking of the day ahead, U.K.'s Brexit preparations have been dealt what some call a body blow. The country has lost one of its top European diplomats. The man who was going to head the crucial negotiations. Well, he's decided he's Brexiting himself. QUEST MEANS BUSINESS.


QUEST: Britain's ambassador to the European Union has resigned only months before Brexit negotiations are due to begin.

[16:20:00] Ian Rogers seen here with the former Prime Minister, David Cameron, who appointed him to the role, was set to play a leading role in the U.K.'s exit from the EU. Now, Britain's negotiating position could be seriously weakened. Nina dos Santos is in London for us tonight. Nina, why is he gone?

NINA DOS SANTOS, CNNMONEY EUROPEAN EDITOR: Reporter: Yes, we don't quite know yet why he's gone. All we know, Richard, is that he decided to inform staff earlier today. This has been acknowledged by the U.K. government, which thanked him for his work over the last three years in Brussels as the UK's ambassador to the EU. But he does, nevertheless, as you point out, leave a number of months earlier. Just a couple of months before Theresa May was planning on activating that Article 50 get-out clause, by which the U.K. could start to withdraw from its membership of the EU.

We do know that Sir Ivan was put in a rather difficult position just a month or so ago, when his private views to the UK government were leaked to a news organization. Views that showed that he said that it would probably take about ten years to negotiate a proper Brexit deal and proper replacement of the kind of deals that the U.K. has with this other EU 27 partners. And that had been viewed as rather pessimistic by some pro-euro skeptic, pro-Brexit members to have the government. I should point out that at the moment, some pro-Brexit papers are currently greeting his departure with delight. "The Daily Telegraph" saying, they acknowledge the fact that he stayed on for a few months after the Brexit vote, but that he should be replaced, they say, by somebody who is positive about Brexit. Whether it's positivity or practicality that wins the day, Richard, well honestly, time will tell.

QUEST: But how serious is it? If you accept that it's going to be a team of people hosting or holding the negotiations. The U.K. is already short on negotiators for trade and for Brexit. So how serious is it being viewed that they've lost somebody of that stature?

DOS SANTOS: The U.K. is between 300 and 500 people short according to some reports in terms of its negotiating capability, Richard. This is a country that hasn't actually had to negotiate a free trade deal for the best part about 30 years. That's a whole generation of trade lawyers. And this is the most senior negotiator that they have that they have just lost. The big question is, who replaces him from here? If pro-Brexit members of the government, euro sceptic members of the government get their way, it would be somebody who is far more positive about the official stance. By the way, the U.K.'s official stance of managing to negotiate Brexit is two years, not ten. But really, will that help this country to get a slightly softer Brexit than the hard Brexit that the markets are worried about. That's the big question this evening.

QUEST: And just bring us up to date, it is the start of the new year. We are awaiting the decision from the Supreme Court in Britain on whether or not Parliament has to be consulted. Do we know when we're going to get that decision?

DOS SANTOS: We're probably going to get that decision, we think, before those March negotiations are set to begin. Remember, Theresa May has said that she would like to invoke Article 15 negotiations for the U.K. to exit by March. Probably that decision is likely to come. I believe it's around a month, if not a couple of weeks before then.

But before then, I should also point out, we have this other interesting situation, Richard, where it's 60 years since the signing of the Treaty of Rome will be happening amid great fanfare. And if the U.K. hasn't tendered this resignation, if you like, from the EU between now and then, we could have this ironic paradoxical situation that Theresa May is there among all the other founding members of the EU, but she's the only one leaving, but they're celebrating the fact that for 60 years, they've managed to create the EU, even if one of those partners is prepared to leave soon.

QUEST: I suspect she'll have to be there anyway as a member, but Nina Dos Santos, good to see you. Thank you.

The Eurasia Group says it's not economic recession that threatens the world in 2017, it's geopolitical recession. The group has released its list of the top ten risks for the coming year. It sees a g-zero world without a global leader. Risk number one, America under Donald Trump. There are other countries to watch, Germany and the future of Angela Merkel. That comes in number three. Turkey and the President Erdogan's expanding powers, number eighth. And number nine is North Korea. We celebrate and we wish a happy new year to Ian Bremmer, the president of the Eurasia Group. Come on, Ian, obviously, Donald Trump is the biggest geopolitical, you call it risk, I would say a matter of interest in the next 12 months ahead.

IAN BREMMER, PRESIDENT, EURASIA GROUP: No question. The fact that the U.S. president is driving geopolitical risk is something that five years ago, ten years ago, you would have thought is inconceivable. But today it's an obvious point. It's not at home. It's that the United States has renounced the idea of American exceptionalism. Not only are we not going to be the sort of a policeman in the Middle East, which has been decreasing under the two Obama's terms, but also on global trade and critically on global values. You can work with the Russians, Europeans may not be that important.

QUEST: You talk about a dependent America in this. And you say, "Trump America's first philosophy builds on the core of American values. It's not an obvious near-term benefit or of its provisions of the public good or [16:25:00] others writing free, it's not something the U.S. should be doing." That's how you talk about it. But Donald Trump would say, no, you're wrong, Mr. Bremmer.

BREMMER: How would he say that?

QUEST: He would say it, because if America is strong and America is first, then all the allies would benefit accordingly. It's the weakness in America that has caused so many problems.

BREMMER: He might say that over the long-term, but it's very clear. Look at the people who wanted Trump to win around the world. Not in U.S., there were lots of reasons to vote for Trump in the U.S. But internationally, you had Putin, you had Victor Orban, Kim Jong-un. These are not people that want the United States to be successful. These are people that wanted the U.S. to be diminished. And it's very --

QUEST: No, that is one -- that is a very negative way of looking at it. You could arguably say that those who can't want Trump to win were part of the swamp in their own establishment era.

BREMMER: You could argue that, absolutely. There's no question that globalization is something that Trump believes is anti-patriotic. And all of these corporations have said looking at their own profits and not of the interests at home. But the Chinese see Trump's win as a big opportunity. And the reason they see that, is because Trump's the one that killed the TPP. Because of Trump, American allies in Asia and their leaders say, we can't count on the U.S., we used to be able to. China sees that as ability to make a lot of for themselves. Not with the U.S., a different model.

QUEST: So, what we have here in all this. You've got China overreacts, the weaker Merkel, the White House versus Silicon Valley. But if we take China and Russia, neither country has seen Trump's teeth when he perceives their actions are harming the U.S.

BREMMER: Well, Russia and China are very different issues on this. The Russians, of course, see that Trump is a win for them. Get rid of American exceptionalism. Deny the possibility of Russian hackers.

QUEST: o, no my point is, that Putin hasn't seen Trump turn against him.

BREMMER: That's true. That's true. Putin has seen the exact opposite, right? Where China has seen that the Americans are saying, we'll put a question on the one China policy. Where now he's tweeting about North Korea and the Chinese aren't doing enough to help. The Chinese are going to give it back to the Americans. There's no question. Trump does believe that America's negotiating position globally is a lot stronger than it has been. And he thinks that if by pushing hard, he can get more. I personally believe that while America remains the only super power in the world, that America's negotiating position internationally is actually a lot weaker, because its allies in Europe are weaker, because its allies in Asia are hedging, and China is more --

QUEST: You are -- the White House versus Silicon Valley. Why is that a geopolitical recession risk?

BREMMER: It's a risk because unlike companies like Ford and Boeing, who can do a deal easily with Trump, give some more jobs in, and those are points that both sides can put on the board, with Silicon Valley, that's hard to do. It's hard to do first because they control the new media, and that's going to be oppositional with what Trump wants to do with it. It's also because Trump's security interests are going to be problematic for their business interests.

QUEST: I have one question for you.

BREMMER: Go for it.

QUEST: Aren't you just one of those elites that Donald Trump wants to drain from the swamp?