Skip to main content

tv   Charlie Rose  WHUT  January 31, 2012 3:00am-4:00am EST

3:00 am
>> rose: to want, a conversation about china with david barbosa, he is the shanghai correspondent for the "new york times." >> you know, a lot of the chinese who have studied in the u.s. now are lured back because what's happening in the u.s. is there's not the energy that they want to... that they see happening in china and so that is a big lure for everyone, right? for the foreign companies, corporations moving to china. the students who studied abroad. that china is where the action is, it's where the money is, it where's the optimism is. and because it's in many ways an immature economy, it's going to be like that. you come back to the u.s., it's a mature economy and so people are looking at things differently. so when i travel around new york city i see that what are people saying when you walk down the street or are sitting next to them on the subway. it'sbout enjoyment, about
3:01 am
pleasuren something. or social activity in china it's business, it's drive, it's what are we going to do tomorrow and that is infectious. >> rose: we conclude with another conversation about the world. a conversation with nevil usdell from the coca-cola company. >> if you look at what's happened over the last eight years, kafr is now on the move. i'm biased. i love the continent, reall subsaharan is reay... where i spent time. i'm involved. a lot of my private work there now is actually in africa. i've been there five times this year. i'm involved with some n.g.o.s there. so i'm moving around the continent and i see real change taking place. there's a real middle-class that's developing. which is fundamental to ensuring that you get democratic institutions and i see a desire for them democratic institutions
3:02 am
as well. >> rose: barboza and isdell coming up.
3:03 am
>> rose: china's the world's second-largest economy after the united states. you knew that. it's been a remarkable transformation of a country that began market reforms only three decades ago. it's noween as a global superpower. china faces many challenges, including growing labor unrest, income inequality and developing a less export dependent economy. we have brought different voices from business and politics and media to come to this table to talk aboutchina. david barboza joins me now. he is one of them. he is the shanghai correspondent for the "new york times." he just co-authored a long feature on the poor working conditions a apple's chinese suppliers. i am pleased to have him here on this program for the first time.
3:04 am
welcome. >> >> tha you. >> rose: how long have you been reporting from china? >> just over seven years. >> rose: a you came there from... >> the ccago bureau. >> rose: was it something you want to do because you knew is was a story? >> well, it was a little accident. i was the chicago business correspondent but i ended up spending a year in houston, texas, covering enron. >> rose: i know that about you. >> living out of a hotel and a service apartment and my colleague in houston was the beijing bureau and the shanghai bureau was open so he suggested that i apply for the shanghai bureau and i thought... you know i studied chinese history in college and i had a real interest in chinese film and in art and it's... it was already... the story was the business in china is growing fast so i said can i go and visit th shanghai bureau, i asked the editors. >> rose: before i accept this job. >> because i'm not sure i would want to leave the country and could i ve in china?
3:05 am
my images of china in 2000 and 2002, 2003 when i was first considering this where it was... the images were from the 1970s, you know? that it would be difficult to live, you couldn't eat the food. all these ereotypes so i took the trip december, 2002 and immediately fell in love with shanghai and china. >> rose: what did you fall in love with? >> well, i think part of it may have also been the diggs answer the between at i was expecting and what i found. now at the time there was a chinese woman that wa interested in inew york. >> rose: really? (laughs) >> that may have played a little role though we were just at the beginning stages. >> rose: i'm glad you brought it up. i was going to ask about it. >> that was maybe some influence but also i had spent a year covering enron and i was thinking everyday for that year i was thinking about jeff skilling and cooking the books and all that stuff and finally i found something this is an exciting city, much more modern
3:06 am
than i thought it was. everyone i met on that first trip sort of told me about the dynamism of china and so they were smart, they were energetic, they looked good, the city was beautiful, we went out for good food and indeed it would be quite easy to live in china. that's what i was thinking, it would be such a hardship to live in china so i thought this has not only the social part of it personally for me, i was single at the time still, but also professionally i thought this is... if you want to cover business, this is the story. of course, there wasn't a story today but it was becoming a story. >> rose: but beyond what we're talking about is t economy and what's happening and its impact on the world. what's the cultural dynamism there? >> i think across the different areas, when you're talking about business or culture or... you can feel the energy when you're in china. maybe you felt that when... >> rose: yeah, right.
3:07 am
>>... there last. that everyone is hungry to create something new. and i think that also got me interested to write abt china. that every story is the scale of it. the dynamism. you talk about factories but it's amazing to just see mething growing that fast where everyone is energetic, where everyone is sweating every moment of life and when i come back to the u.s.-- which is once a year-- it's really shocking to see the distance. there's energy in new york but when i travel outside of new york and even in new york a little it's pale in comparison. you know, a lot of the chinese who have studied in the u.s. now are lured back because what's happening in the u.s. is there's not the energy that they want to... that they see happening in china and so that is a big lure for everyone, right? for the foreign companies, corporations moving to china.
3:08 am
for the students who studied abroad. that china is where the action is, it where's the money is, where the optimism is and because it's in many ways an immature economy, it's going to be like that. you come back to the u.s., it's mature economy and so people are looking at tngs differently. so when i travel around new york city i see that what are people saying when you just walk down the street or sitting next to them on the subway? it's about enjoyment. it's about pleasure in something or it's social activity in chin it's business, it's drive, it's what are we going toe do tomorrow? and that is infectious when you're around it. >> rose: let's talk about the pieces you have been wring about. these suppliers. >> first piece is sort of looking at apple's move overseas. so it opens with steve jobs at the white house meeting obama and obama pose this is question of what it would take to bring
3:09 am
these jobs ck to the u.s. and steve jobs basically says it's impossible. what we're getting out of china right now, with the engineers, the flexibility of that system that's not gng to easily come back to the u.s. so that first piece which, again i didn't write the first piece but it explores that idea about what does it mean to lose these manufacturing jobs. is there a multiplier effectn the manufacturing jobs that create miss more jobs for the economy and how is the u.s. going to cope with ts new world? and we're using apple because it's the most successful company and most profitable, it can afford to be anywhere. it can afford to have manufacturing in the u.s. because it's got huge profit margins but it chooses to be in china. and the second piece which i'm the co-author of looks at some of the consequences for... at least the consequences for the
3:10 am
workers in china. so they get the jobs, they benefit tremendously but there is also a cost over the last six or seven years abo labor conditions and we decided to really zero in on apple and on fox con and looking at some of their best products and say what are the conditions there? what is it like to be a chinese factory worker. >> rose: and what's the toll. >> what's the toll. >> rose: suicide in some cases. >> suicide in many cases, yeah. and also i've interviewed hundreds of factory workers. it's still an amazing eerience to me to visit the factories in china and go home with the workers and ask them about their lives. whats your schedule like day to day? where do you live? most of the ones, for instance, at the factory we visited are ling in the dormitory and just this one facility at... in chengdu,
3:11 am
120,000 workers. these are factory cities and so they have factory dormitories and factory restaurants and you... generally a formal factory worker in china will work six days a week and at least ten hours a day. at least. >> rose: tell the story about the time tha apple decided it needed to change something and some foreman put together 10,000 workers. >> that's right. that's right. that's from the first story which i didn't do most of the reporting on that but it is an illustration of in that case they decide i think maybe that was glass screens that they wanted to replace and so they are able-- and this is the... what china has, it has... when you have hundreds of thousands of workers in the dormitory right next door, if you need to change something at the last minute, you rouse those workers, they're single,these are not "i0 in the morning, we need to produce, everyone will come and check in." and it's a monstrousork force.
3:12 am
they say they got a biscuit and a glass of tea and they came in at some odd hour and started producing. >> rose: something have taken an american to turn arnd at least siweeks? >> absolutely. absolutely. and this hapns across china. it's not just fox con and apple it's all of these facilities. tremdous... i mean, this is the china model, the factory model which is we'll have tens of thousands of workers and we'll have them in dorms and we'll give them schedules that generally mean six days a week ten, 12, 14 hours a day and over their heads will be this machine that records how farther off quota or quota, some will be paid by piece. they have worked it ou in some of these factories to the point of they're looking at your motions to see how many times you can move your arm to do this
3:13 am
motiono produce that particular object. and i... i've been on many factory floors, just to stand there and to see the workers working on that fast assembly line, it's pretty amazing and daunting and you wonder how can they do this ten to 12 hours a day? >> rose: but what's happening to the macroeconomy in china? >> it's certainly slowing down. 2007 it was roaring and inflation like other places. 2008 it started to slow down, 2009 some bumps but 2010 and 2011 took off again and inflation was sort of out of control and now we're starting to see some moderation in the economy. it's slowing down. >> rose: they're sayin it may to 7%, 8%. >> yeah. >> rose: is that a soft landing, as they say in >> well, 7%, 8% is... i don't know if they've been at 6% or 5%
3:14 am
in 20 years. >> rose: but that's not a soft landing. that's hard. >> for them that would be consered a hard landing, only 6% growth in china when you're so used to having 8%, 9%, 10%, and maybe in some case 14s%. a lot of those numbers were revised several times so we think over the years when they claimed it was 9% or 10% it may have been stronger. >> rose: do you think people looking at china and seeing state capitalism may be a better mol? >> they are. i ink they are. i think it's still unclear what state capitalism really is because they're in this hybrid stage and it's partly this; partly that. and there is a major part of the chinese economy is the shadow economy and that's what makes it difficult for reporters like myself and others to really measure the economy and really... >> rose: what's the shadow economy? >> the shadow economy is you have shaw banking. so a lot of the banking occurs outside of the major state-owned banks. shadow bankingmight be... let's
3:15 am
say you're a ste-owned telecom company or a state-owned shipping company and you also have bank. because if you're a state-owned company you'll get loans from the state-owned bank, advantageous rate d probably companies will be lking for capital and will be willing to pay a much higher rate because they can't get anything. so you decide, well, we might have on the side of this shipping company a trading arm, a banking arm and multiply that by everyone that knows th private companies a willing to pay very high rate. so if you have any access to capital, why don't you just create your own shadow bank. >> rose: but doesn't every state company have an advantage? >> it does. it does. and this is how they take advaage of that advantage and in many cases another part of the shadow economy is there are parts of the state-owned companies that are kind of broken off by the people working
3:16 am
in them. let's say i'm working at this state-owned shipping company and i'm an executive and decide, well, on the side i might want to operate my own company that utilizes the assets... the advantages that the state owned company for my own personal gain. and i'll tell you one... i'll give you an idea from one story that my wife has told me where she went a couple of years ago a state-owned company to have some work done and the state-owned company said to her "well, if you'd like this work done, it will cost you $100,000 butif you're willing not to get a receipt i have my own private company which is also in thisvery building which will do the very same work for you, the very same quality... >> rose: at? >> at one-third the cost. but you won't get a yessept and it happens to be my own personal company. now, she's told me that, other supreme told me that. i'm sure that happened. >> rose: how large is that? do you think that's a significant phenomenon?
3:17 am
>> i don't think it's significant enough to think it's going to sway the economy one way or another but multiply that a lot through a lot of state owned companies and you could have big shadow banking or trading or off the books. i think the gray economy, the shadow gray income is huge. >> rose: so what do the chinese worry about? what could burst this balloon? >> a lot of things. they worry about what we talked about which is slowing... the growth slowing to 5%. >> rose: so therefore there would be unemployment, therefore there would be social tension. >> that's right. i mean, you've got the last 30 years pretty dramatic growth and people getting used to better and better condition now all of a sudden en ople are still doing quite well in the united states but it looks so bad compared to what we had before and since china is... there's so much optimism and dynamism, if things start to get
3:18 am
worse we don't really know how they'll react. we don't really know what eletons will come out of the closet. >> rose: but they seem enormously petrified by the idea of instability. >> yes. and i think maybe one of the things... >> rose: the leadership does. >> i think one of the things maybe it's difficultt a distance to see and i remember on your show it was talked about before which is they don't know how the people with rising expectations will deal with troubles and they also don't know whether money would start to flow out of the country. now they've got too much money coming into the country so it could trig sore many things so it's... and when you're sitting this far and you don't see all of the problems that the chinese government is trying to handle you don't get a sense of why they would be... why is% so scary? but when you're inside of china you can see there's lots of riots, strikes that we don't really write about.
3:19 am
there's so many. we mentioned one other story about apple but there are lots of strikes at chinese factories. there's lotsf unrest that's not reported or that's reported just in small part. so there is$1.3 billion people. there's a lot of tension. the chinese government has a lot of things to worry about and the criticism despite they have media censorship in ctrol of the message, the criticism can be pretty strong. >> rose: against the government? >> against the government. we saw thiin high-speed rail accidents. so i think they have to worry about the economy. they have toorry about the banking system which, you know, he's going to be worrying aut the security system. he's taking over now, the s.e.c. their chinese s.e.c. when stock prices in shanghai have plummeted 50%, 60% since the high. there's lots of government debt. so i would say they have a lot of things on their plate to
3:20 am
worry about and they know that. >> rose: and what are their ambitions? >> i think right now it seems china's ambition is to be respected. and you can see that with the olympics and with other big infrastructure projects and with the trips that they're doing to the united states and overseas to be respected and to have an economy that maybe the biggest economy in the world and to have things sorof balance. that's their goal maybe, i don't know. maybe it's t their ambition. i think their major ambition is to get rich and be respected and right now they're doing a good job at that. >> rose: what skills do they have that we don't in thenited states? >> i wouldn't say it's skills i would say it's attitude. >> rose: okay, what's this? >> and that is... i'm not so sure i can explain why there's this attitude but it's what i see in china. it's the attitudehat i am willing to endure a lot of suffering to make just a little
3:21 am
bit more money and to fight for every last dime and to negotiate. when i'm traveling around china i have to end up negotiating a lot of the taxi... we have to negotiate with the car. it's a difficult process negotiating with the chinese. that attitude, that energy, that drive is something that they're not a mature economy, they're coming out of... >> rose: they were ready for capitalism, weren't they? (laughs) >> they were... they were more than ready. >> rose: (laughs) bring it on. >> this is really a new form of capitalism. it's like you cannot turn it off. and it's people willing to work ven days a week almost 24 hours a... >> rose: to get ahead and more money so they can choose things. >> that's what i mean you have to be there to see. why are you dng this job when where you're working 300 hour a month? it's phenomenal. >> rose: how much corruption?
3:22 am
>> enormous amount of corruption. i mean, major, maj problems. >> rose: because there's so much money floating around? >> i've asked people who've been there longer than i whether the corruption is worse today than it was ten or 15 years ago and almost everyone said it's much worse. >> rose: well, you've got to assume that because there's so much more money around. but since the economy has developed and since the country has developed you would think also they put in place lots of things that would reduce that corruption so i think everyday corruption if you went 20 years ago and tried to take a taxi there was nickel and dime corruption. that... i think it's not easy to see that. i don't witness that. but the big-scale corruption is bigger than ever. >> rose: and what about the princelings? >> the princelings? well, the princelings are the sons and daughters of the top leaders and right now they're a major force in private equity and they're players in almost
3:23 am
every business they're not written about very much inside of china. they're written about occasionally outside of china. i would say the princelings, this is a very, very important story to look to in the next few years because a princeling will become the next president of china and also because the princelings are involved in every sort of business. so you just don't know when you're in a certain business that you may run into a princeling. >> rose: the new president who takes fice, when you k you tell us aboutt? >> not much. the current president and the current prime minister, wen jiabao, there's not a lot known about them. we knowe's the son of one of the top leaders of china under o and w know that he was selected long ago. >> rose: he suffered during the cultural revolution. >> that's right, that's right. >> dave: they change? a new generation of leadership change? will china have a different
3:24 am
attitude and more secure and confident attitude than the china of hu jintao? >> people are hopeful. some people are hopeful. they think that because he is the son of one of the highest leaders that he will be more confent. i mean, hu jintao, wen jiabao did not come from that lineage. that he will have the confidence to sort of lead and also to change things but i think most people think things are not going to change dramatically because of the risk. it really is... one person doesn't really lead china. >> rose: people have told me to wait for the generation after him. because they have grown up with different values and circumstances and they may be different. >> right, right, right. but people also said wait for the second term of hu jintao and lots of things will change. wait for the next guy and... but i think... i mean, what... many of the experts in china say to me is that the change will come when they're forced to change.
3:25 am
right now they ha an economy where they've got too much money right? they have to turn away money. evyone wants to be there. e foreign companies complain that, you know, that the nditions are not good for us in china but they are all throwing their money into china. so i thi when china goes through me hardship-- and we don't... tt could be in the first term. if the economy slows down considerably. there's dislocation with the recommend men bidepreciation defresh@ing he could face challenges in his first term as president then we might see major changes. renminbi. he could open up the media, he could change the tway structure of the political system. but i the change will come... pressure.
3:26 am
it may force someof this change. way boar... >> rose: tell us what that is. >> rose: wayboar is china's twitter. and it's a eye gahn i can company and i think waybor has 200 million subscribers and it's probably much more powerful in china everyone's on way-b.o.r. it's scary because if you become the target of some attac it can be ferocious. as the chinese government has learned that, weibo has lit up. so they're using weibo to measure the popular opinion into... to get some idea of where the tensions could be. where the small fires are burning.
3:27 am
and way boar is outing corrupt officials. putting receipts on line. >> rose: but also didn't cc-t.v. take on phi due? >> i think cctv taking on buy due was a little strike back at the internet company because cctv is losing vwers right now to the internet. oots thing is cctv took on a furniture maker in china and it turns it later on another magazine took on cctv to say that actually they are... their investigation into this da vinci furniture maker was extortion. where the journalists had
3:28 am
actually... they claim had actually tried to extort money from the furniture maker to ta... to not... >> rose: if you pay me i won't be as hard on you as i might otherwise. >> that's right, that's right. so actually i think the... what this tells you a little is that the atmosphere is changing in china since i've been there where there's a lot more openness in the media to attack one another, there's weibo mixing it up. >> rose: why is human rights such a problem for them? >> i'm not entirely sure but it is a major problem for them. and i think the reason... >> rose: fear and insecurity. >> they have learned what they believe are the lessons of tiananmen square and that just a little... if you open up the way just a little... you wonder why do thetake on these dissidents? some are not very important but they feel if you open that door
3:29 am
a little and let this guy do it then that guy wants to do it and what i found in china is that there is this powerful communal force and so for instance we'll go back for a second to foxconn. people jumping off buildings and committing suicide. just a month ago a group of 150 workers angry about their pay go up to the topof one of the factory buildings and several of them say mass suicide if we don't get what we want. now foxconn disputes that and says it was only a few who said they would jump but this kind of action scares not only foxconn but the government that things will grow like this. people will get the idea that you can threaten, you can fight for your rights, you can gather and pretty soon 20 people is a
3:30 am
million people and they don't want that risk. >> rose: it's a pleasure to have you here. david barboza, the "new york times" correspondent in shanghai. pleasure. come back any time you're in new york. >> thank you. thank you. >> rose: neville isdell is here. he was the c.e.o. and chairman cocaola between 2004 and twine. he is credited with turning coke around after it expeenced deining market share and mass layoffs. he als brought a glebl profile to the job. he was born in northern ireland, brought up in africa and worked in the philippines, germany and america. isdell writes about his life and career in a new book called "inside coca-cola." in full disclosure, ts comny has been a long time supporter of this program and i'm pleased have neville isdell come to this table for the firstime. welcome. >> thank you, charlie. >> rose: what made you decide at long last to write about these experiencesoff've had around the world? >> two things.
3:31 am
i always wanted to write a book. >> rose: i know, yes. >> a different type of book but friends said to me... i tell stories about things that happened around the world and a lot of friend said "you've got to write a book, you have to put do that down." and essentially one year after i retired i realized if i don't do it now the moment will be gone and therefore i decided to do it. >> rose: do i remember that you were trained as a social worker growing up? >> yes, i was. >> rose: and you made it from that to being a c.e.o. what did you think you were going to do? >> originally i thought i was going to be a social worker and then i realizedhe life-style i wanted to follow wouldn't be supported by the salary of a social worker. >> rose: was it good training for understanding people and the pathology of what makes people... >> well, i think it was extremely valuable becae as a social worker in many respects you've got sanctions, things you can give them or take away. but really you have to make people make up their own minds to change what they're doing and
3:32 am
i think at was the greatest lesson i learned as a social worker. >> rose: how did you get to coca-cola? >> ha! i got to coca-cola through the father of a former girliend. and he had offer med a job when we were dating and i said no and when we broke up he offered me a job, a franchise bottler in zambia and that's how i started. >> rose: africa today, people tell me, is one of the most promising potential areas for a whole lot of things because of natural we resources, because it has not been discovered in terms of capitalism to a large degree. because there are more and more stable governments. do you see it that way? >> absolutely. and it's obviously a mixed picture. but if you look at what is happened over certainly last eight years, africa is now on the move. i'm biased. i love the continent, really subsaharan is where i spent
3:33 am
time. i'm involved. a lot of my private work the now is actually in africa. i've been there five times this year. i'm involved with some n.g.o.s there. so i'm moving around the ntinent and i see real change taking place. there's a real middle-class that's developing which is fundamental to ensuring that you get democratic institutions. and i see a desire for those democratic institutions as well. rose: that's one o the fundamental characteristics of the emerging markets, isn't it? the development of a middle-class? >> it's fundamental because when people have gotsomething to lose then they are looking to have stability. when people have got nothing, you know, whoever is the oppressor it really doesn't matter. >> rose: how many places you've been working around the world and had all the experiences, there is a sense that a global company-- especially coca-cola with the brand name-- probably understands as much about the world in some aspects because it
3:34 am
understands the cuure it has to operate in as governments. >> well, you know, there's the olquote that jimmy carter used to use and used to say that... >> rose: who was from atlanta, by the way. >> he was from atlanta. he used to phone the coca-cola company when he wanted to know something as well as the state department. but i think that's a exaggeration. i think the depth of knowledge... i'm a trustee of the nter for strategic internatnal studies. i think depth of knowledge there is phenomenal. but in terms of a cultural set what does set coca-cola apart is in fact, it is made up of... of people who are from all around the world. so it really is a united nations... you look at the management, it's a whole united nations. th's the point of difference. so while we're on the table you've got voices from all the way around the world. that's where the additional culturalimension comes in and a different level of
3:35 am
understanding. >> rose: there's also this. take how many... how many of your employees sayake a country or local. is it generally 90%? >> 98%. 99%. >> dave: are low sdmal >> yes, lati america is run by a mexican. if you take... europe's run by a french woman. asia's run by a colombian. the chie counsel is in australia. so you get this mixture of cultures that automatically come up through the managerial flow. >> rose: let's take you the moment in which you get a call from donkey owe. you're retired. you retired at what age? >> 60. then you get a call from don keogh who was a friend of mine and this program and he says we want you to be first he says we want you to come back and there's a question of jack welch coming to be the c.e.o. of
3:36 am
coca-cola and you would be the number two. >> it evolved to that but don never promised me job. he asked me would i throw my hat in the ring. kehoe. he was the head of the search committee of the board. they had a number of names, high profile names. don kehoe. keogh. and my stock in trade was that i was the insider. >> rose: you knew the company. >> and that prevailed. >> rose: tell me how you think the role of the c.e.o. and global companies is changing and the experiences you had that shaped you for the sponsibility you had. >> well, two big questions but the first one is not only the role of global corporations changing but the need for them
3:37 am
to change. because i think we're at a stage where the trust and... in business has been significantly undermined by a number of happen t happenings and primarily what's happened in the financial arena but that's overflowed into trust in business leadership and more importantly to a social contract with citalism and i think that's a great danger so i think the connectivity to society-- and i write about that in the last cap chaper the-- is something that's vital for 21st century companies. and that's where you see the water work that coca-cola does for example that i was involved in. >> rose: that was your... >> well, no, i inherited somef that. i mean, it was a company thing. i enhanced it and now it's been taken to the next level as well.
3:38 am
when you're involved with society you need to think about where off foot print in the company and it's legitimate to spend shareholder funds. and water for coca-cola... >> rose: you use a lot of water. >> it's a key ingredient so we need to have it available. >> rose: how do you define the thing that used to be called corporate social responsibility. >> it's not just expected it's really looking at areas where you have a negative impact and not just first mitigating that impact but actually being a positive elementof making sure that's not globally negative. if you look at what's being done around palm oil, for example. but it's connected to strategy because it depends on a proper
3:39 am
contract with regard to palm oil and sufficient palm oil from sources that are not tearing up the rain forest. the other thing that's happening though that pushes it but also legitimizes it is that n.o.s have crossed a big bridge as well. because if you take... i'mn the board of the world wildlife fund, for example, so i... we had an agreement with them at coke and then i crossed over the other side. the case has been made in many respects by the impacts that the companies have in society but when someone like the world wildlife fund has done that they say what resources have we got to implement? how can we bring about real change? yes we can shout fm the pulpit and the bully pulpit does work but can we find a collaborative way of moving ahead with a common agenda that legitimately addresses the problems? and that's the magical thing
3:40 am
taking place right now. >> rose: tell me how it's making itself manifest beyond tt. >> i think the next element is governments becoming involved in it. i talk about the triangle of sustainability. i think governments are lagging behind on that. i ran the seminar i had in atlanta on just this issue back eaier this year we had the head of care international and larry sumrs and larry said clearly th governments are still inhe legislative policeman role and they haven't come into the collaborative side of it to this point in time and i think n.g.o.s and businesses are leading the way and governments are following. >> rose: but because n.g.o.s and businesses are leading the way then government will become more collaborative and it there will be more privateublic partnerships in terms of press social issues that extend beyond the here is bottom line concern of the businesses?
3:41 am
>> ielieve that's going to happen. >> rose: environment stands up dramatically doesn't it? >> yes, it does. but the environment is tied in with resources and things like you mine, et cetera. >> rose: there's also the question of governments and regulations and what regulations are appropriate and necessary and some privat companies feeling like regulations are an impediment to their growth and that they are bureaucrac and stifling. >> rose: i think there are too many regulationsnd i think that when you last see any law that was last repealed they stay on the statute books and more are put on. >> rose: glass-steagall would be one. >> yes, but they're very... that's one but there are very few. that may not have been... (laughter) >> rose: that's true. as soon as i said that. in general terms i think i'm
3:42 am
correct about that. and the bureaucracy that develops around that is clearly an impediment of business but i do not take the position that the role of government is not to legislate there are very legitimate area you you this of road safety. >> rose: transportation. planes. >> government has to be the policeman of those areas and has to look after society as a whole but too much governmental involvement and guiding of things doesn't work, i'm afraid and i think we are overregulated from that standpoint. >> rose: mutt tar as you know made a statement sing it was easier to do business in china sometimes than to do business in the ited states. >> well, it is because the rahm emanuel fork is much easier. you could they will evolve and it may well involve but i think it's the speed. what he was talking about as i see it is the speed with which
3:43 am
decision making is made. there is an urgency about decision making because they wa to move very, very rapidly. there is a timid di in the regulatory process and the western world where rewards in terms of people who were in those positions is not making the mistake but getting something done. it seems to mewe're looking at as you suggested by coca-cola international training is almost essential today for people who assume the leadership of major corporations to understand the world in a way that most citizens don't have an opportunity to do. >> i think that to compete in a globalized world you have to understand you have to understand other people. you have to understand how to collaborate, not just within your own country but collaborate
3:44 am
on a global basis and i think companies that win are those that are able to do that and part of that is becoming global in your own management and the points that i made earlier. >> rose: so take coca-cola, for example, when you look back at your tenure as c.e.o. and handling different issues whether there was criticism what did you learn about handling criticism of the company that's the public... criticism exists in a world that offers so many... that offers so many menus for criticism? >> i think there's a general lesson here and i'd go to the changes that take place with general motors and the default mechanism was tuls argue the case on technical grounds about why whoever was making the ce was wrong which may or may not have been the case i think if
3:45 am
you see the issue in terms that just came out where you say if you're worried about the car we'll give you a loaner car and we're looking into it. we don't have any evidence but at this time if there's any problem whatsoever this is a serious issue and we'll look into it. that's what you've learned. you've got to be seen as being really responsive. the moment you go to denial you set up added aer have sarl relationship. there's a problem, maybe only a potential problem, how do we work together to solve it? and if it comes out as it very often does that it was a non-sue no one's lost face. >> rose: and transparency always... >> transparency is very, very important. total transparency is often different because people think in the situation you have all the facts, we don't.
3:46 am
you don't have a full hand. you're still trying to find them as well. >> rose: what lesss did coca-cola learn? >> rose: oh, i think a lot. i think. >> rose: such as? >> listening to your consumer. asking the right questions. the research-- even though it was the most expensive research ever taken place- didn't give the right answer. >> rose: in other words you acted on bad research? >> well, we didn't ask the right question. >> rose: that's a very important point, i think. what question didn't you ask? >> rose: how would you react if we took away the existing coca-cola? >> rose: oh! >> the assumption was-- what we discovered later on-- that people hasn't... coke was taken away and the new one put out there so you deprived people of their existing coke. you hadn't given them the choice. this whole issue of asking the right questions is very, very interesting because when don
3:47 am
keogh fired me i asked for some time and i... there were rumors going around so i wasn't totally surprised but i would say i'm not going to do it for all the logical reasons. one because my wife didn't want me to do it. she liked having lunch together. you know her so you realize why. >> rose: indeed, indeed. >> but, you know, i didn't nd it. i really didn't and thinking of e way i was going to have to work. it was going to be seven days a week and she said well, what if you fail? what's that going to do to you? you've had a scessful career? and all of those things said i'd be crazy to do it. and then i realized i'd asked myself the wrong question. >> rose: i think this is a great story. go ahead. >> the question was very simply can i live with myself for the rest of my life in i turn down this challenge? and i knew i couldn't. i had to do it. >> rose: how was it when you came back?
3:48 am
you had to give life to a company that lost its way a bit. >> a bit. there was still the strength of the brand coca-cola. i think people look for lessons, these are all situaonal. situations are always different. i had the greatest coca-cola ant was still pristine there were issues but still pristine. that was really what i used a the main engine to bring back essentially what was a strategic but also a belief problem. the morale in the organization was poor. we had research which showed that. that wasn't anecdotal. i had the benefit of that interview procs because i d just over three months before they made the decision to think
3:49 am
about what i eyesed to call "what does theog do when he catches the bus?" >> rose: (laughs) he can't eat the bus. >> what am i going to do? so i had time to think about it and also get data and information and that was very, very useful. >> rose: thinking about what you might do? in other words, if, in fact, when you took over how you would handle what your responsibilities were? what your priorities were and what kind of team did you want around you. >> yup. all of that. of course i still had the connections within the company. i was able to talk to people like don and a number of other people about people who were in the businesses at the time. there were a few select ones who were brief that i was a candidate. gary fayer, the c.f.o. gave me the numbers and was able to look at those. so i had... i junt just thrown in. i had time to think about how i wagoing to do it and prioritize it because the most
3:50 am
difficulthing in any siation where things are not going the way they should be is to try and fix everything at once. the most difficult decision you make man syrialy is to s something that's wrong and do nothing about it. because you've got to prioritize >> rose: say that again. >> the most difficult thing far nothing do is to se somethinging that is wrong and do nothing about it. because you can put owl fires all over the place and you lose your drive to fix the three main things that actually turned the business around. >> rose: you said one of the things you're most proud of is the fan necessary toe for growth. what is it about that the? >> well, it's two elements. it was clearly defining a strategy and it was answering the question that you posed to me about mission. but it was something that... how it was done and that was just as
3:51 am
important because you need... any road will get you there if you don't know where you're going to so we had to define that. but i had the belief that the people in the xren knew what that road was and the traditional way is you get in consultants or six people get in a darkened room for ten days and they write the new edict from the mud and then go out and preach it. but i felt taking the time to get the people... i was there all the time, i was leading it. but i tried to sit back and they came forward with the fan test toe for growth. by the time that was there place i had wasted probably three, four months but i gained it a the other end because i had total commitment. the senior management, the top 150, in fact you could argue 400 were involved in writing it. so.
3:52 am
>> rose: the pride of ownership? >> the pride of ownership so they said we've heard this before, why did that the not do this? why didn't they think about that before? well, we had because they had. so that was awful the table. now let's go to the next thing that's important, execute, implement and get done. >> rose: i know people coming out of university, yuck people, they're deciding what it is they want to do and what would be your advice to them today? >> it's ry difficult because i really didn't know what i wanted to do. >> rose: but it's okay not to know. >> it's okay not to know. the majority of us are like that. i envied people that are very happy being doctors and they knew they wanted to be a docto i wasn't like that. i don't think most people are. you're going to have to delve around and that's what i did. the test, really, that you have to put to yourself is am i happy doing what i'm doing? because you can do down and road
3:53 am
and therefore you think well, i'm making a mark here and this is going to be my lifend i have to stay with this part but you go home at night and you haven't enjoyed what you're doing. i don't think you could ever really be successful. you certainly can't be successfuln life but you can't be successful in a career unless you enjoy what you're doing. not everyday, it doesn't work that way. >> rose: what percentage of the world population enjoy what you're dng? >> i would say 10%, 20%. that may be high. you only have a look at... some of the people doing jobs that you come across who are sitting behind a counter and they don't want to relate with you and you can see they're unhappy sitting there. you see a lot of that. yet you see some people doing the same job and they say good morning to you and they love interacting. >> rose: and there's the pride of doing it well. >> and it's the same job and it
3:54 am
could be defined as mealian but it's not. it's important to them and they love it. >> rose: was there any experience that you wished you had running coca-cola when you were responsible forturningt around that might have benefited you in terms of the past exrience? or did you feel like i have all e tools i need to do this job? >> it's arrogant to say you had all the tools. i didn't have all the tools and i don't think any of us ever do. we have our weaknesses and our strengths. i think terms of what i've got... i've been on the bottling sign side, i've lived in 11 countries, have knowledge of the business. i think i was pretty well equipped. there were those that say i should have been chairman of the c.e.o. earlier. i disagree. i think i needed to mature another bit. i think even retirement was good. >> rose: that's an interesting point. being away from it might have been good when you came back to it. >> yeah because the social dynamic is very different because you get elevated amongst your peers. there's some sort of envy, some sort of well, yes, we know
3:55 am
neville's going to do this, that and the other. you're removed from a couple years, you come back in. particularly if it's a difficult situation. you're welcomed back in a very different way. you've got more flexibility for action. you're much more relaxed about yourself and that's very important so i think i got dealt a very good hand in terms of the way things evolved. >> rose: congratulations on this book. "inside coca-cola. a c.e.o.'s life story of building the world's most popular brand." thank you for coming. >> thank you, charlie. captioning sponsored by rose communications captioned by media access group at wgbh
3:56 am
3:57 am
3:58 am
3:59 am