Becky Quick (2:21)

Good morning, everybody. Welcome to Squawkbox right here on cnbc. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is out this week. President Trump says that a deal to end the war in Iran is close, but Iran dismissing a US Ceasefire plan. Our very own Dan Murphy joins us right now. He is live in Dubai. And Dan, what's happening there on the ground?

Dan Murphy (2:44)

Becky, good morning. Well, markets really caught between two narratives this morning. On the one hand, Iran has formally rejected the US Cease fire proposal. And the foreign minister, Abbas Arakchee says there are no negotiations, only messages being passed through intermediaries. So what? President Trump is calling talks, Tehran is calling message delivery. And then on the other hand, the Wall Street Journal also reports today that mediators from Turkey, Egypt and Pakistan are pushing for a face to face meeting between US And Iranian officials. And the US and Israel have also removed Iran's foreign minister and parliament speaker from their kill list for four to five days so they can participate if talks go ahead. It is a significant diplomatic gesture, a kind one at least, but also a measure of just how fragile this entire situation is. And of course, the gaps here are enormous. Iran wants compensation for war damages, the closure of all US regional bases and the right to charge international shippers to transit through the Strait of Hormuz. Or Washington of course wants Iran to surrender its enrichment program, open Hormuz and Kurbitz missile program and proxy network as well. Remember, every single one of those demands was a non starter before the war. And then the voice from the Gulf is also growing louder. The UAE Ambassador to the US Yousef Al O Taiba, calling for a conclusive outcome to the conflict, not just a simple cease fire. He said that building a fence around the problem would simply turn defer the next crisis. And then you have the CEO of Abu Dhabi's national oil company, Sultan Al Jabba, meeting with Vice President J.D. vance at the White House overnight, telling him that restoring free passage through the Strait is the only durable solution to stabilizing global markets. And that is also on top of fresh condemnation in a statement of Iran from other major Gulf states today too. And as we approach this one month milestone of this conflict, it is also reported that President Trump wants this war over before he sit down with Xi Jinping in Beijing in May. Iran is of course still publicly refusing to negotiate and the US Ground troops are deploying to the region as well as a reminder to Iran that diplomacy isn't the only option remaining on the table here. Becky.

Becky Quick (5:03)

Hey, Dan. We have always watched the Iranian regime sort of use negotiations as a way of kind of, I don't know, stopping the clock, slowing things down, giving them time to, to figure out more about what they're doing with their programs. In this case, President Trump is using time as the cudgel. Basically you have these deadlines come to the table or else. I thought it was very interesting that the White House said yesterday that the President has now rescheduled that trip with Xi Jinping in China for the middle of May, which he called it off this time around because he didn't think it looked, he said he didn't think it looked right to be traveling at a time of war. That seems to indicate that he thinks that this will be over by the middle of the month. Is that the feeling that leaders there in the Gulf seem to seem to get as well?

Dan Murphy (5:54)

That's the exact feeling, Becky. It appears as if the White House is vying for more time here. It was reported that the president was hopeful that this conflict would be over by the time he could meet President Xi Jinping. But of course, the timeline on these negotiations remains really unclear at this point. The Iranians aren't necessarily giving much back to what the White House is offering. And while the president is sounding optimistic and very hopeful, the US Indeed sounding like it has the leverage here, given the military pain that it's been able to inflict on Iran. And of course, the status of where we stand in the conflict today, suggesting that the U.S. of course, has the upper hand. But what's left of the Iranian regime appears unwilling to negotiate at this stage, as we've been reporting. The wellness and whereabouts of the new ayatollah, still unknown at this point. And exactly who is leading the negotiations on the Iranian side is still unclear as well.

Joe Kernan (6:53)

Lead story in the New York Times. We forget Israel has been intensifying its attacks on key targets regardless of what we do. I mean, Israel was is just going straight ahead, as they say. I don't like the term, but going forward with airplane, I think maybe we forget that. So this is an onslaught against Iran and they can put up a brave face, I guess. But Dan, can you confirm that one of the naval leaders instrumental in blocking the strait, I heard he's dead. I don't know whether you can confirm whether that's true. And what I'm getting to is when Trump says, yeah, we're talking to people, but we're really not sure who to talk to or how long we're going to be able to talk to this individual person. And you mentioned maybe taking a couple of people off to kill us just so that they're there, you know, at least until tomorrow to negotiate with. It's crazy.

Dan Murphy (7:55)

As awful as it sounds, the strategy of the US and the Israelis is to keep the most valuable people alive in order to come forward with the negotiation and the next steps of this conflict. On Israel's position, though, I think you make a really interesting point, Joe. Of course, Israel for many, many years has basically done the dirty work of the United States and of the Gulf states inside the Middle east, and it is signaling that that will continue as well. As you say, strikes have continued in the last 12 hours. And at the same time, you have to remember there are three parties in this negotiation, that is the United States, Israel and Iran. Only one of those parties is expressing optimism about a future off ramp here, a diplomatic solution and an easing in those military onslaughts as well. So look where Israel stands on this, particularly as we see Netanyahu coming into the election. His own election is a big question mark too.

Joe Kernan (8:58)

A jury in California after the other case we talked about yesterday. This is new finding meta and YouTube negligent in a closely watched social media addiction trial, a young woman alleged that she became addicted to apps like Instagram and YouTube when she was as young as six. She was a child. The jury worked to determine whether Meta and YouTube included design features in their apps like recommendation algorithms and autoplay features that contributed to her mental distress. The 20 year old alleged that she suffered from severe body dysmorphia, depression and suicidal thoughts because of her constant, her near constant use of the apps and notifications that made it difficult for her to stop. Compensatory and punitive damages were each assessed. That $3 million or $6 million total could have been much more. Although they say if you do, you know, if you do, the initial damages are 3 million. It's hard to go over 10 times that for punitive. That doesn't usually fly, but all they did was match it with the punitive. In a statement, a Meta spokesperson said, we respectfully disagree with the verdict and are evaluating our legal options. A Google spokesperson said, we disagree with the verdict and plan to appeal this case. Plan to appeal this case misunderstands YouTube, which is a responsibly built streaming platform, not a social media site. And this opens up all kinds of discussions that we'll be having in terms of the plaintiff's bar. And one individual said this really is ringing the dinner bell for the torture.

Becky Quick (10:42)

Comparing it to the new Big Tobacco,

Joe Kernan (10:43)

Big Tobacco or mesothelioma or. And there's 3,000 pending cases in California and we're in this age of, you know, used to be kill the lawyers but now it's kill the billionaires. And you know, these companies are trillion dollar valuations, some of them and they have, you know, heads of the companies that are targets, billionaires and it's going to see it, it's going to ramp up. It's just hard to prove cause and effect on an individual case. Notwithstanding my view that this is like a pox on society, a lot of

Becky Quick (11:16)

the social media I can Understand your arguments on this. I really can. I can also understand the other side that, hey, between this and the case that they lost in Arizona. Yeah, this is a situation where they have lots of internal documents and internal messaging that shows all of these concerns about what was happening were flagged, were known by the company and were ignored by the higher ups. And that's why they have a leg to stand on with this. Look, I get the company's perspective that you can't just blame us. They're right. There are so many more things that fed into this. You can probably say Covid and the closures of schools and a million other things contributed to anxiety and the depressive thoughts that kids see. I saw that with my own kids,

Joe Kernan (12:02)

but I don't go on Facebook. I've never been on Facebook.

Becky Quick (12:06)

The algorithm.

Joe Kernan (12:07)

But does this mean you can never someone that. Not me, but someone who would look good on a beach so you never can post another beach?

Becky Quick (12:19)

No, that's not what this means. I think what this means.

Joe Kernan (12:20)

But if it makes people get body dysphoria because.

Becky Quick (12:23)

But if you look very specifically at kids, and as Jay Clayton, who was here yesterday pointed out, look, they know who you are. They target ads to you specifically. That's part of the magic of these companies from a business perspective. Why can't you know who kids are and then stop targeting them with some of these things to protect them, first of all, from predators? And second of all to say, hey, maybe we shouldn't be targeting kids at all, or have an algorithm feeding them anything. And look, you can blame parents for allowing them to do this, but it's really hard to not give your kids a phone or to allow them. I don't have my son on any of these social media apps. He's left behind as a result. He's a bit of a social pariah as a result, with some of these things, it's really hard to say no. Do you not give your kid a phone because you want to make sure that you know where they are and make sure that you can pick them up and make sure they're safe on different things. But I agree with Meta's perspective that it's really hard. And mental health is a very complex issue for youth. It's very hard to say that it's just them, but I think it's also hard to say that they haven't played any role in it.

Joe Kernan (13:27)

I don't think anyone would.

Becky Quick (13:29)

But to this point, they have kind of said, it's not on us. And that's why you wind up in a situation like this. You know, they have pushed back on some of the changes that even the Arizona attorney general laid out yesterday to say, we want to see changes to your very lucrative algorithm. They've pushed back on that for the longest time. And maybe that's where you. I agree. I don't think they should pay for everything.

Joe Kernan (13:52)

But I don't know what a world without section 230 really looks like. I don't. I mean, that would be a chilling.

Becky Quick (13:58)

It's been used as a coverall.

Joe Kernan (13:59)

It has, but it's been.

Becky Quick (14:01)

But without it, it's been decades.

Joe Kernan (14:02)

Without it, it's. I'm leaving and going back into law school.

Becky Quick (14:06)

Originally based on CompuServe, but back when CompuServe was basically just an online bullet point.

Joe Kernan (14:11)

Well, I'm going back to law school and I'm going to become a plaintiff's attorney. Get rid of that. Because that's how. And I wish my parents are gone, but I wish someone would take Twitter away from me and say, you're not

Becky Quick (14:21)

allowed to go, well, now you're fighting with the AI chat bots, so it's okay.

Joe Kernan (14:27)

I do fight with them. They're as bad as the trolls, some of them.

Becky Quick (14:32)

Probably better for you to fight with the AI chatbots, maybe.

Joe Kernan (14:35)

I don't like these billionaires because they're the ones that have not changed the bias of all the AI bots. In my opinion, it's just as bad as the social media as Twitter was before Elon Musk bought it. It's just as bad. Run by the same people out in California.

Becky Quick (14:53)

An interesting thought experiment that we're going to be following for some time because I agree they're not to blame for everything, but they're not to blame for nothing either. And I don't know where you find the middle ground on that. Well, baseball is back, but opening day does come with some big questions off the field. With a labor fight looming and major media shakeups coming, the league could be on the brink of dramatic change. CNBC's Alex Sherman joins us right now. He's standing outside Citi Field in Queens. And Citi Field, home to one of the real halves in Major League Baseball.

Alex Sherman (15:27)

Yeah, the Mets are sort of the, along with the Dodgers, are really the two franchises that stand out in this current era of baseball as the big spenders. They're always kind of the top two teams that spend the most from a salary perspective on players, which should, you would hope, relay to winning the Dodgers. That's been the Case the Mets were still waiting. Maybe this is finally the year, but Major League Baseball is at a crossroads right now. At the end of this year, the collective bargaining agreement expires. And it is pretty well known now that the owners want a salary cap that will probably also come with a salary floor if in fact they're able to get something done. The players union for decades has pushed back on this concept of a salary cap. Major League Baseball is the only one of the four major US Sports not to have a salary cap. But it has spoken to the strength of the Players association that they've been able to successfully push back against this concept, which allows teams like the Dodgers and the Mets to pay really exorbitant prices for the star players in the league in particular. But if you take a look at the ebitda, the earnings margins of baseball teams versus the other three sports, they're a lot lower. And you're starting to hear more people from the league standpoint and from ownership standpoint speak out against this. Yes, valuations of teams are rising. Yes, TV ratings are up. Yes, attendance is up. But because the spending is so high on baseball relative to the other sports, the profit margin is not up. And so that is sort of the crux of this labor crisis, which could in fact almost certainly will come to a head at the end of this season.

Becky Quick (17:13)

Hey, Alex, you look, I just think of how we look at, let's say, Wall street banks. You look and find out exactly how much of the meat they're feeding to the bankers. And you could do the same thing with any of these leagues. The players received in the Major league baseball, about 47% of revenue in 2024. Now that was down from 63% back in 2002. But it's not that far off from what you see with the other major leagues. The NBA, they get 49 to 51%. The NFL, they get 40, 48%. The NHL is 50%. That seems like that's going to have to be the way they look at this. What percentage do you get? And then how does the union decide to divvy that up? Do you want to have these really sky high contracts but then have the median player making a lower, much lower amount of money?

Alex Sherman (18:00)

So look, I think one of there's a bit of a tension here in baseball today, which is that you don't want to interrupt positive momentum. I just talked about how the ratings are up, attendance is up. There's a reason that the players have been able to successfully push back on the salary cap. Year after year after year. And it's partially because of the argument you just made where they say, look, it's not all that much different than the other sports. Yeah, we don't have a salary cap, but frankly, we don't even buy the argument that if you put a salary cap in here, it would improve the things that the owners are complaining about, such as profit margin and also competitive balance, which there's a major argument on. If there's actually an issue of competitive balance in Major League Baseball, it all depends on how you look at it. I mean, many different teams have won World Series over the past 25 years. A lot of teams do make the playoffs. The playoffs is quite random. Then again, if you just take a look at the bottom eight teams, there's definitely a correlation, as you might suspect, between spending and competing. There's these kind of things that are rubbing up against each other in Major League Baseball, which makes, I think, what happens at the end of this year very much an unknown.

Joe Kernan (19:08)

I think you're burying the lead, Alex, and I'm going to tell you, I'm going to give you an example. So when you're either, let's say you're betting or let's say you're just a real homer for the Reds or something like that. I have seen umpires make calls that have killed rallies. Strike calls, ball and strike calls. Like, it'll be, I don't know, oh, and 0 and 1 and. And you need to. And. And they'll call a strike. And It's. Now it's 0 and 2. The batter's in a different position. It's way out of the strike zone. It's just, it's unbelievable how bad they're changing that, are they? Not this year. This is. I, I need this. I. And, and I think the sport needs it.

Alex Sherman (19:46)

Yeah, well, I mean, they're not going all the way to robot umps, which is what I think you're describing.

Joe Kernan (19:52)

There's a challenge. There's a challenge that can be made by who? The catcher, the batter and the manager who gets to.

Alex Sherman (20:02)

We saw it for the first time actually yesterday in the Netflix Yankees game where each team has a certain amount of challenges. Again, it doesn't go all the way, however, to what you're describing there, Joe, which there is a group of people out there that want it to get that way because you figure out what is the point of having a human call balls and strikes if they're just going to get it wrong? So why not, why not just go all the way to robot if it means getting the call right, who cares at this point? Let me just throw one more thing at you, just quickly, which is that not only are we on the verge of a potential CBA breakdown, but also Major League Baseball media rights are up at the end of 2028. That's in flux. There may be expansion in 2029, at least, putting two teams in place to expand the league. That may come with complete realignment. That could even eliminate the American League and the National League, institutions that have been around for more than 100 years. So the whole league is potentially in a state of transition here that's maybe a little bit dissimilar to the other major American sports leagues.

Joe Kernan (21:10)

All right, thank you.

James Quincy (21:14)

Teas will be next.

Cameron Costa (21:16)

Coming up on Squawk Pod, Coca Cola CEO James Quincy. He's leaving the CEO position at the end of the month after leading the stock up 75% during his tenure.

James Quincy (21:28)

It was time to put someone else on the field for the next wave of growth, the next three years. The next three years after that.

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Dr. Guy Winch (23:38)

Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insights to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts,

Cameron Costa (24:12)

You're listening to Squawk Pod.

Becky Quick (24:15)

At the end of this month, Coca Cola will welcome Enrique Braun as its new CEO. After nine years at the helm, James Quincy has overseen the evolution beyond just soda to a total beverage company. We've talked about lots of new additions that are coming in. Milk, Topo, chico, coffee, lots of other things. He's also shaken up Coca Cola's corporate culture and has led the stock along a 75% gain. That compares to a much smaller gain for Pepsi. I think it was up about 33% over that same time. Joining us right now is James Quincy. He is the chairman and CEO of Coca Cola. And James, thank you for coming in today.

James Quincy (24:51)

Great to be here. Great to be here.

Becky Quick (24:53)

You know, I still marvel at the idea that you are stepping down. You, you're only 60 years old. You've done a phenomenal job. I spoke with Warren Buffett about it yesterday. He said not only have you done a great job as an operator there, but you're just a wonderful person to boot. Why are you leaving at 60 years old?

James Quincy (25:09)

Firstly, thank you to Warren for the generous word. Look, you know, it's one of those things and the CEO's job sometimes is to take decisions not being fought that no one wants you to make. And you know, as you go through the business cycle, in a way, there's kind of these three plus year cycles, you kind of, you set on a course, you get things done. Some work, some don't. And there's kind of waves of the organization momentum. And we were coming up to another one. And of course, my job is also to think who's the best team to put on the field to get the next wave done. And I concluded that actually it was time to put someone else on the field for the next wave of growth, the next three years and the next three years after that, and work with the board to say, look, let's put someone else on the field, you know, with the wisdom and the experience, but the energy around some of the newer areas that need to be pursued and that'll be the best thing for the company. And that's part of the responsibility you shoulder.

Becky Quick (25:57)

That is the same thing that Doug McMillan told us. He's also very young man who's stepping down after a time there. And he basically said, look, I know the energy it's going to take to put us through the AI evolution. He's done it several times and that he's ready to have somebody else do it. So what's the evolution that's taking place at Cocoa?

James Quincy (26:16)

It's not dissimilar. If you look at what I said at Cagney in 2017, one of the four things was digitizing the enterprise, which we did, but in a pre AI, pre gen AI mode. We made a lot of progress. But now there's a huge new shift coming along. And I love the thing, I mean, I'm an electronic engineer, I kind of geek out on it. But it needs someone with the energy to pursue a completely new transformation of the enterprise, which is not a one year, two year problem, it's a multi year problem. So you've got to think not just who's the right person for 2026, but who can take us on the next stage of the journey and see this through. And that was the important decision.

Becky Quick (26:53)

One of the most important decisions any CEO makes is who is going to succeed him. Why Enrique Braun? What does he bring to the table? What made you say, here's, here's the person who can do it?

James Quincy (27:03)

Well, obviously it's a process we do with the board and we started looking at the, you know, the pipeline of talent from the day I started and I'm sure we'll start again from the day Enrique starts. What he brings to the table is 30 years of experience. So he understands where all the buttons and levers are in the system and he has experience on four continents. So he comes with an ability to understand where we've come from and what needs to be kept going forward and the changes we made over the last 10 years being on the leadership team. But he also brings the energy around the things that need to evolve and the things that need to transform. AI being one of them. The changing nature of the consumers demands and the geopolitics and the way the world needs to be changed and pushing the organization to do that. And that's where he's got the energy. And so that yin and yang, the focus on preserving what's good, yet using digital to do better. What we do best. We're not a tech company, but we need to use that technology to take our competitive advantage to another level. And he brings that passion in insight and energy.

Becky Quick (28:03)

You spent 30 years at Coca Cola too. Worked all through the system, in Europe, in Latin America, all over the place. Does it take somebody who has spent decades at an organization, at a large organization, to be able to lead it?

James Quincy (28:20)

Not always, but you certainly have an advantage if you've got the right mindset. Because it's a vast enterprise. Prices in almost every country between us and the bottling system, there's 700,000 employees. And the world is not flat. It's not the same everywhere. The Coca Cola business is not the same everywhere. We have different brands and different portfolios. So being able to understand how the business is different around the world, to understand all the key players in the system. It's not a ones and zeros business, it's a relationship business. It's a physical business in the physical world. There are over 1000 factories in the Coke system around the world. Understanding that landscape is a tremendous advantage. When you think about what needs to run. Of course you can't be trapped by it, but you've got. Having that knowledge is a super advantage.

Joe Kernan (29:06)

You've been. I was just trying to remember everybody since Goizata and some of the names that I came up with I had forgotten already. But it was a very hard thing to replace. And he died, I think kind of suddenly. So you went to Ivester and then some guy named Daft at one point. So you worked for some of those gentlemen.

James Quincy (29:30)

I was there.

Joe Kernan (29:31)

Was it hard to replace who I was thinking, were you the next like preeminent Koch CEO or Muktar Kent was well thought of, was he not? Well thought of?

James Quincy (29:40)

Yeah, he kind of got the like. It had destabilized itself when. When Roberto died suddenly. And it was a mess. It was a mess internally, it was a mess externally in the strategy. And it took a long time, including with Muta, trying to re stabilize the ship. But yeah, this is the first time we spent 10 years growing since the 90s.

Joe Kernan (30:02)

That's so nice. I remember how difficult it was. What did he. I remember it was true.

James Quincy (30:07)

Longcat. He was a big smoker, right.

Joe Kernan (30:09)

And he was young, I think it's late 60s. Oh, was he late 60s? But it was unusual that because he was so well thought of.

James Quincy (30:17)

Yeah, he like actually when you look at it, we kind of went into a trough in the 70s with the stagflation. We interestingly, Roberto Goswetta and Don Quixote was another famous. They kind of thought being extrapolation. Doing an extrapolation from the 70s. They thought, well, let's diversify. We bought Columbia Pictures. We did a whole load of crazy stuff. Stuff. And then they went, this is all wrong. We need to get back to the Coke business. This is the gold mine. And from the 80s through the 90s it was an extraordinary.

Joe Kernan (30:43)

And then I remember New Coke and at the time that was like thought of as kind of. And it's still used in I think college courses is a mistake. But.

Becky Quick (30:52)

But the way they handled it.

Joe Kernan (30:53)

But it opened up. It opened up the path to Coke Zero and everything else. And you didn't need to be only Coke. And actually suddenly Coke became Coke Classic and that became a new brand.

James Quincy (31:10)

And also they had the humility to go, we've made a massive mistake.

Becky Quick (31:13)

That was done, kid.

Joe Kernan (31:15)

Anybody that doesn't know it's oh, New Coke. I mean it's amazing that that's still.

James Quincy (31:18)

But they could have kept. They could have kept trying for ages, but they didn't. They said, no, never mind.

Becky Quick (31:22)

We hear you.

Joe Kernan (31:23)

Sure, right?

James Quincy (31:24)

Yeah, dead move on.

Joe Kernan (31:25)

Well, you've changed Project Kansas.

James Quincy (31:28)

That was the book's in the World of Coke. You can go and read it.

Becky Quick (31:32)

Yeah. You have changed the company in a lot of ways though, by wanting to be a total beverage company and not just stick to sodas. That had to be pretty hard to come into Atlanta and say we're going to change things up. Because people do remember New Coke so well as the time they got burned.

James Quincy (31:50)

Yeah, look. Interestingly, I was not the first person to say we should be a total beverage company. We then failed to align all the subsequent strategy and organization and cultural decisions to bring that to a reality. Which is part of why we went into a morass for an extended period of time. But I said, look, if we want. The principle that came before Total Beverage Company was if we want to be consumer centric, like what is the ultimate North Star? If you look at the other food and beverage companies, people who keep trying to make things that consumers have moved on from, like you got to put the consumer at the center. From that you then go, they want choice. So why am I selling one thing when they want choice? I need to sell a title portfolio and so the consequent decisions flow from that, including get. Getting to a town hall to make it clear to people. I stood up at a town hall early on and said, coke doesn't have to be your favorite beverage. Which was blasphemy. That was actually. Sharp intake of breath.

Joe Kernan (32:43)

I can't believe we got some Brit to run the most American company of all. Think of, I'd like to buy the world a Coke. Coke. And is there any other company where you'd say hot dogs, apple pie and Coca Cola? Warren Buffett. It's the most iconic American brand I think around.

Becky Quick (33:03)

And it's being run by a Canadian now.

Joe Kernan (33:06)

But the stewardship, I mean, that was a big responsibility for a brand like that.

James Quincy (33:12)

Remember, I. I grew up with that dream of Coca Cola, the American. I mean, I grew up in the UK in the 70s, which was the Cold War. You know, I went through Checkpoint Charlie into East Berlin. Like Coca Cola was emblematic of something we were trying to get back to in Europe, which was freedom and prosperity. Like it wasn't that long after the war. And so I always loved the brand. Like as a, as a, as a young kid, 12, playing squash, my dad then going to the pub, how he had a beer. I have a Coke like that. I love the brand and the company. So it wasn't a challenge. It was something I really wanted to do.

Joe Kernan (33:46)

You never work a day in your life if you love the job that you have, right?

James Quincy (33:50)

Imagine people ask me for careers advice. I say, do something you love. The chances are you'll get out of bed earlier and you'll care more about doing it.

Joe Kernan (33:57)

Well, it shouldn't be 3:15, but you're

James Quincy (33:59)

right, 3:15 is a hard ask.

Becky Quick (34:02)

James, you've seen, seen so many things. I think back to when you went to Argentina. What was it, 2001, when they were dealing with the crisis there. Inflation got out of control. We've lived through things like that since then. Geopolitical issues that are taking place here, inflation that we worry about, that we've lived through. Post Covid too. How do you kind of look at what's happening in the world today and say, here's how you need to really think about things. Lessons you've taken away from your experiences.

James Quincy (34:29)

Yeah, I mean, the Argentinian one was a. A true education. Went from being one of the most expensive countries in the world to one of the cheapest countries in the world in a space of about three weeks. They defaulted. They devalued that. Five presidents in two weeks. They closed all the banks, they devalued by 75%. It was a. What it taught me is look, adaptability. Like just because you think strategy A is working, something could come along and you just need to change. But like new code, it's like you just go, no. Yes, that was the past, but now we have to change. Let's move forward, everyone. But also having a degree of resilience and redundancy built in the system, which was useful for us in Covid. We never squeezed the supply chain so much. That was so just in time that we were exposed to all sorts of risks. No, we have a degree of redundancy and resiliency in our supply chain because we know things are going to go wrong. It's already happened this year. So we make sure that we have an ability to survive the initial shock and then have the time to adapt and move on to the next thing.

Joe Kernan (35:29)

I called you a wildebeest when you walked in because you remember, that was off the record.

Becky Quick (35:35)

It was an off the record conversation.

Joe Kernan (35:36)

But we've talked about it. Not now, We've talked about it since then. But I think that I can remember you having, I think, a bit of a evolution in terms of corporate, of what a CEO really should do culturally and whether you should weigh in on every single cultural issue in a divided country where 50% might feel one way, 50% feel the other. You're initially, I think.

James Quincy (36:04)

And that's before I add the other countries.

Joe Kernan (36:05)

Right. But I think initially you were ready. And I can remember a few times where I thought, oh, this guy's woke and he's, you know, he's ESG D. You know, you were all. And I think you kind of evolved to get to the point. Where did you evolve?

James Quincy (36:18)

Yeah, I think that's totally fair. It's like you start off and you're

Joe Kernan (36:21)

like, well, explain the wildebeest. There's like a thousand of them. If you stay right in the middle, the lion probably isn't going to pick you.

James Quincy (36:30)

The ones that get eaten are the old, the sick and the ones on the outside. But then you have to decide. So generally the wildebeest that survives, the ones in the middle. The lesson, the journey of the learning is it's a bit like you're in this job, which no other job prepares you for because you're not exposed in any other management job. It's that way that you are as a CEO and you're kind of like, what do I do with all these issues? And there was a bit of learning and eventually I kind of came focused in on actually it's not for me to be in everything. I could just be the will to be submit. There will always be a few issues that are central to the company.

Joe Kernan (37:02)

I agree.

James Quincy (37:03)

It's the point of deciding. It's not about me. I'm not the owner or the founder of the company which is a distinction. I'm a representative of the shareholders employee and therefore I'm and I can't divide my voice from the company. People are not going to make that distinction which I think was also a journey for people. Can there be a distinction between your personal view and the company? And I said no, in the end there is not. It's got to be one of the same. You've got to represent the company and therefore I'm going to talk about things that are central issues to the company. So if you talk about water or waste on packaging like these are central business issues to the company and therefore we should have a point of view. There are lots of other issues where I might have a personal point of view. It's not central to the company and that's the thing I learned because I

Joe Kernan (37:44)

think the world has changed a little bit and come around to the wildebeest viewpoint.

Becky Quick (37:52)

James, you are so good at what you do, so smart and again so young. What are you going to do as your next act?

James Quincy (38:00)

I'm not sure what the next act. The thing that everyone tells you is don't make any decisions right away. And that's what I will. That's what I will try and stick to. But I don't know what the next is. I'm certainly going to be executive chair supporting Enrique in this transition and taking, you know, making sure he gets off to a great start and keeps the thing rolling. And then I'm not sure I need to kind of stand back and go where can I add some value from a kind of societal point of view? You know I don't CEO that's not the that for sure is not going to be in the future. But there's a question of what's next and I think I need to stand back and reflect on what am I interested in and what would be productive.

Becky Quick (38:40)

Yeah. What do you care about?

James Quincy (38:41)

Yeah, exactly. But that's a process of reflection. It's very hard to do that when you're 247 as the CEO.

Becky Quick (38:47)

Yeah.

Joe Kernan (38:49)

A lot of people think the only next thing they should do could top what they've done as CNBC contributor.

James Quincy (38:58)

Yeah. Where's Andrew?

Joe Kernan (39:00)

I cannot believe that both of you just Broke out laughing at that. No, think about it.

Dr. Guy Winch (39:05)

We would love to have.

Joe Kernan (39:06)

Have you on all the time to talk about.

Becky Quick (39:07)

You don't have to be a contributor. You can have the seat whenever you want.

Joe Kernan (39:12)

You get paid a little if you.

James Quincy (39:14)

I'm not sure I like the getting up a little.

Joe Kernan (39:15)

Emphasis on a little getting.

James Quincy (39:17)

Yeah.

Joe Kernan (39:17)

And I'm thinking we went with no jacket. Maybe we just go with no.

Becky Quick (39:21)

You know what?

James Quincy (39:22)

It's too hot to wear a jacket.

Joe Kernan (39:24)

You did something.

Becky Quick (39:25)

You're wearing jeans today. And you did in your first presentation that you made to the street, too. That was pretty important. Yeah, Sending a message.

James Quincy (39:33)

There was a famous saying at Coke, which is, everything communicates. And generally people in corporations think it's the PowerPoint or the corporate speak memo that communicates, which is the thing that most employees just ignore. And actually media and everyone. But they pick up on the visual symbols. And so to communicate change was coming. I wore jeans, which is in Atlanta at the time was fairly conservative, hierarchical. Everyone was kind of jackets and slacks. And I wanted them to realize change was coming. I knew they would ignore everything that got said because it kind of gets lost. But if I wore jeans, they would realize change was coming. And the same thing was on the media. We had to communicate to people that we were changing, that something was changing and we needed to drive reconsideration about what needs to get done.

Becky Quick (40:16)

Well, I can't thank you enough for being here with us and for being able to watch you over the last many years. It's really been a pleasure.

Joe Kernan (40:24)

A person who handles these things just said, yes, please. So, yes, yes, please, for contributing. I swear to God.

James Quincy (40:32)

Immediate feedback.

Joe Kernan (40:33)

Yeah, immediate. Right. Say it here and it comes out there.

Becky Quick (40:35)

James, thank you.

James Quincy (40:36)

Thank you.

Becky Quick (40:37)

And come back. We want to hear more from you, especially as you think about what you're going to do next.

Joe Kernan (40:41)

Good.

James Quincy (40:41)

Thank you.

Becky Quick (40:42)

Thank you.

Cameron Costa (40:44)

Next on squawk pod, we're headed to Capitol Hill. The DHS funding negotiations are at a standstill as lawmakers creep closer and closer to their Easter recess. The Democrat breaking with his own party on DHS funding and voting with Republicans to confirm. DHS Secretary Mark Wayne Mullen. It's Senator John Fetterman.

John Fetterman (41:07)

It would be profoundly irresponsible for us to. To leave unless we figure this out.

Becky Quick (41:14)

Foreign

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Kelly Cavagnaro (42:18)

Hey y', all, it's Kelly Clarkson with Wayfair. Ever order furniture online and wonder what if? Like what if it doesn't fit?

Becky Quick (42:25)

Little to the left? No, wait.

Kelly Cavagnaro (42:27)

Yep, should have gone with Wayfair. Or what if it doesn't hold up?

Jeep Advertiser (42:31)

That sofa was four days old.

Kelly Cavagnaro (42:32)

Should have ordered from Wayfair. Or what if it's that material that makes that noise?

Becky Quick (42:37)

It was a sofa.

Cameron Costa (42:37)

I swear.

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Cameron Costa (42:52)

Welcome back to SquawkPod.

Becky Quick (42:55)

You're watching SquawkBox right here on CNBC. I'm Becky Quick along with Joe Kernan. Andrew is out this week in Washington, Congressional Democrats and Republicans still at odds over how to fully reopen the Department of Homeland Security. DHS has been in a partial shutdown for weeks, leading to TSA staffing shortages at airports. A test vote on funding the department failed in the Senate. Pennsylvania's John Fetterman was the only Democrat to vote in favor of that measure, the acting TSA administrator telling lawmakers that the agency has lost close to 500 workers since the shutdown began and that some travelers are facing four and a half hour wait times at airports. CBS News is reporting that the White House rejected an offer from Elon Musk to pay TSA workers during the shutdown. I don't think it's legal for a private entity to pay government workers. We are going to be speaking with Senator Fetterman just to get his thoughts on this, hear why he voted in favor of it. If he thinks any of his colleagues would Potentially vote what would break this stalemate. Plus, we'll talk to him about a

Joe Kernan (44:01)

lot of other issues, too, save ACT and Iran. Obviously he's been a big supporter and proponent of that. I'm not positive about his future in the Democratic Party at this point, but we can talk about that as well. He's got a lot of challengers next time. Some people think, you know him and Dave McCormick and John Fetterman. Son was telling me yesterday, it's like some people think Fetterman's three times more conservative than Senator McCormick. Maybe Fetterman's fine. I mean, it's the people that elect him. It's not, you know, Chuck Schumer can't decide. John Fetterman's not going to be senator.

Becky Quick (44:39)

Yeah, but it's difficult to go through if you don't have a party supporting you. It's difficult to get through the system, which is why you tend to have very few independents, whoever make it through or very few.

Joe Kernan (44:52)

Very few. I guess it just seems like Republicans can't hold their caucuses together nearly as well as Democrats. There's all these, whether it's good or bad. Thom Tillis, you know, people like that.

Becky Quick (45:05)

Rand Paul.

Joe Kernan (45:05)

Rand Paul, however he wants, whenever he wants, whereas on the other side, it's like man lockstep. I don't know who's done something again

Becky Quick (45:14)

other than Fetterman is voted against in the House.

Joe Kernan (45:18)

A few things. Yeah, but in the who in the Senate?

Becky Quick (45:20)

Well, betterment Fetterman at this point.

Joe Kernan (45:23)

No one else has even been close. And Schumer's got problems right now. You know that he does.

Becky Quick (45:28)

I know.

Joe Kernan (45:33)

Democratic Senator John Fetterman joins us this morning. Senator, it's good to see you. Thanks for joining us.

John Fetterman (45:40)

Thanks for having me on.

Joe Kernan (45:42)

We hear, we heard from you probably know the governor of Sununu from New Hampshire, used to be governor. He said with recess coming that that might do it. Is that really the way it works? Will we get a deal, do you think, in the next couple of days for dhs?

John Fetterman (45:58)

I don't know. I mean, I have no specific insight, but. But it would be profoundly irresponsible for us to, to leave unless we, we figure this out. Because at that point there's nothing any we could do once we're in recess for two and a half weeks and already there's mass chaos across America in our airports. So I don't know when it's going to be resolved. But I've always maintained and been the only Democrat to refuse to shut the DH down over these circumstances.

Joe Kernan (46:31)

We keep hearing from both sides that the other side is moving the goalpost. You are, you're a Democrat. What do Democrats, what will Chuck Schumer accept since we've heard that he is put the kibosh on a couple of deals recently?

John Fetterman (46:47)

Do you know, I don't think Chuck really cares what I think because I've the one saying don't ever shut the government down. We used to say the same thing when we were Democrats to the Republicans. Don't shut our government down. That's so irresponsible and damaging. And it is and it has been. We've done the last thing just last year and plunged America into that kinds of chaos and 42 million Americans had their snap suspended. We never delivered anything after all that 43 days of the shutdown and here we are now and it's that same circumstances and all we've done is punished the TSA workers and all the other workers in DHS that are not paid because that's always the wrong thing. And you can't blackmail the other side into policy kinds of changes because it's never worked in the past.

Joe Kernan (47:43)

Senator, what would happen if Republicans got rid of the filibuster? Would you vote for that? Do you think that either side should try to do that out of just pure frustration?

John Fetterman (47:54)

The filibuster? Yeah. Well, I mean including myself, every single Democrat in 2022, we all wanted to remove the filibuster. You know, and I will admit we were terribly wrong. We were so wrong. And now, you know, the one thing that we wanted to get rid of just a couple of years ago, now we love it and we, we bear hug it, you know, and that's a reminder and that, that really vindicated, whether it's Senator Cinema or Manchin, they were right. And I'll be a Democrat to remind people that we were wrong. And now that's, that's an important thing to prevent the majority to run over the minority without forcing some type of bipartisanship.

Joe Kernan (48:43)

Senator, you're still a Democrat and I would never, I would never doubt that. And I'm sure you are very, I know, I'm sure you're very aware of what you think are issues with ICE and immigration. So I'm sure that you have a lot of empathy for what Democrats are trying to do. Is that what is forcing Schumer's hand? Right? Is that what's forcing Schumer's hand right now or is it Schumer's own? Do you think what Republicans say That this is about AOC and the base and he needs to just stand tall against anything Trump wants. Is that what's happening?

John Fetterman (49:23)

No, that's not standing tall. That's just punishing TSA members and DHS ones. You know, I called for Noam to go and she was gone. And she was an absolute disaster. No different than Mayorkas in terms of a disaster not doing their job. And now I had the opportunity to vote and support Secretary Mullen and I did because that's someone I can work with and that changes have already made. ICE is not in Minneapolis anymore and Mullen just got his job. I think it was yesterday or two days ago. So I, you know, I do believe that they're going to make more kinds of changes. It's not going to be because we shut the DHS down. So, you know, what's the difference mean is like I want the same kinds of changes for ICE versus other Democrats. It's just I'm one that refuses to punish Americans and the union members in India too, that that makes the difference as the same Democrat Party, but just unwilling to do.

Joe Kernan (50:28)

And there's a couple other things you've made some headlines on. I think you're a supporter of trying to stop Iran from getting nukes with this latest military action. And also, are you a yes on the save on the SAVE USA act, whatever you want to call it, the voter ID legislation.

John Fetterman (50:51)

Well, again, SAVE act would have been enacting if it wasn't for the filibuster. You know, the same thing that, that, that we as Democrats were calling to eliminate, that then they could have enacted SAVE act because they definitely have all the votes that they would need to do that. So, so, so that's why that SAVE act is not going anywhere, because there's no votes to remove the filibuster. This despite all of the rhetoric coming from Trump and other, some of the Republicans.

Joe Kernan (51:23)

And how about the action in Iran? I can count Democrats, I think on one hand we mentioned Josh Gottheimer. There's a few in the House maybe. I think you're the only senator or you could correct me, anyone else that's been positive about what could result from this that might be great long term in the Middle East.

John Fetterman (51:41)

I mean, not just long term, short term. I mean one of the most destructive regimes in the world having their military capabilities effectively destroyed and eliminating their leadership. In fact, I just, you know, we can acknowledge and celebrate that they just got the intelligence guy that was behind shutting down the streets. So that's constantly a Good thing and always a good thing. Right now, of course there's going to be some fluctuations in oil prices when you have these kinds of things in the area parts of the world where a lot of oil comes from. But I checked where a gallon price of, of gas was 365, you know, and I gassed up two days ago in York and it was around 375 a gallon. So. So for me, I don't think right now the world's on fire, but what would I do? Think it's a good thing. And now that continues to degrade Iran and then I do believe that was the right thing to do. But that does make me the only Democrat in the Senate that supports, you know, epic fury despite, you know, the terrible polling number that as a Democrat, I think it's like 11% of Democrats support that.

Joe Kernan (53:00)

Well, I'm glad you're going to be around till, till 2020. I don't know what your future holds. We don't have enough time to talk about that. But I think on both sides of the aisle, people admire you quite a bit. Senator, and thanks for coming on.

John Fetterman (53:15)

It's like I think it's more important to really put out like real values and real things. And so that's where I'm at. I think what's right, you know, I'm a committed Democrat, you know, and if we become the non big tent kinds of party, then we're going to have the other problems. Thanks for having me on.

Joe Kernan (53:37)

Thanks for joining us.

Cameron Costa (53:41)

That's Squawk Pod for today. Thank you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Orkin weekday mornings on cnbc starting at 6am Eastern. To get the best bits of that three hour TV show right into your ears, follow Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow. Have a great day.

Alex Sherman (54:06)

Clear.

John Fetterman (54:06)

Thanks guys.

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