Hersman on Air Safety, Budget Cuts: Capitol Gains

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Aug. 18 (Bloomberg) -- U.S. National Transportation Safety Board Chairman Deborah Hersman talks about recent aircraft accidents and the possible impact of federal budget cuts on the agency. Jonathan Gruber, a professor at the Massachusetts Institute of Technology, discusses the implementation of the Affordable Care Act. Bloomberg's Evan Croen talks about funding repairs for U.S. infrastructure. They speak with Julianna Goldman on Bloomberg Television's "Capitol Gains." (Source: Bloomberg)

This week on "capitol gains," it is peak summer travel season and a string of accidents has put safety concerns and the spots lined.

We will hear from the national transportation safety board on the latest investigation and what is being done to bolster safety standards and what industries can do.

There is no doubt that in implementing the affordable care act there are going to be some glitches.

With less than two months before american start enrolling in new insurance plans under the present's health care law, what changes can you expect?

We will hear from the man behind the individual mandate who helps reform massachusetts health care system under former governor mitt romney.

And the latest drone technologies fluent to washington this week it is this the future of sushi delivery?

Welcome to "capitol gains," i am julianna goldman.

We focus on the business impact of government action using the exclusive research and analysis of bloomberg government.

We begin with a look at transportation safety in the united states.

Ups cargo planes crashed in birmingham, alabama, killing the pilot and copilot.

Investigators are working to determine the cause.

It is the latest in a string of air-traffic accidents the summer.

Asia on air flying -- asiana airlines 219 crashed in san francisco.

It was the first fatal crash in 2000 that in the united states is 2009. -- fatal crash in the united states since 2009. thank you for joining us.

There has been this spring of aircrafts accidents after what has appeared to be a pretty calm.

. should americans be afraid when they get on an airplane?

Collects what we are seeing is a very busy time for us.

Unfortunately there is no way to predict the cycle of crashes, whether it is in the air or on the road.

Our investigators are ready to go when an accident happens.

That is why we are there, to figure out what happens, why it happened, and prevented from happening in the future.

We have a hard landing at laguardia last month.

Are there any broad conclusions we can be making here you go can be boiled down to pilot air were?

Lex i think it is immature to begin to talk about the cost of all of these accidents.

We are looking at all of those accidents closely.

There are different characteristics for some of these accidents and we need to understand what they are before we issue any recommendations.

Are you worried that after this calm.

That pilots -- after this calm period that pilots have gotten complacent?

We have to be worried about complacency in all areas.

When the safety record is so good at the hay got -- is so good people take their eye off the ball sometimes.

What these accidents remind us is that just because there is a lack of accidents does not mean that everything is safe.

You have to pay attention every day, every flight, every takeoff and every landing.

Clocks have people take in their eyes off the ball?

Clucks certainly, i think what we see is these crashes -- we need to make sure we are vigilant.

We need to understand what is going on, what the interactions between the crewmembers are, what is the direction with the aircraft and if there are any issues?

Different aircraft types, different companies, and different crews.

You investigate each accident separately.

Is there any sort of process that is going on at the same time that is looking at the big picture, taking a more holistic approach?

Collects for us, as an agency, we have different investigators looking at each individual accident.

As they bring the facts go -- the facts home, they look at training and other issues, we have a team.

At team will be looking at any common issue.

We will be looking at opportunities to make recommendations.

We do not have to wait until we complete our investigations.

I want to ask specifically about new concerns of the new 787 dreamliner's. japan found defective wiring in the fire extinguishing system.

This comes after the fire on the european airways plane at heathrow airport.

This is all top -- all on top of the battery issues that grounded the entire fleet.

Are we any closer to figuring out the root cause of these battery issues?

Collects our investigation of the 787 events that occurred in boston last january is still ongoing.

We are conducting additional tests and we hope to complete that work in advance to the year anniversary.

The airplane is flying.

It is the decision the faa made.

What decision gekko?

It is not our role to make this determination.

You do make the recommendation.

We do make the recommendation.

In this case we have evaluated information that came out in our investigative hearing in april.

We are conducting some additional tests.

Owing, as a party to our investigation, has been cooperating with us throughout that work.

Let's talk about sequestration and the budget cuts.

Has it strained your resources?

It has been a drain on our agency.

We are experiencing unprecedented levels of accidents in all modes of transportation.

Many of our investigators are going directly from one accident scene to another.

Summer is traditionally a busy time for respite this year has been even more so.

We are doing this in the middle of a hiring freeze, in the middle of limiting overtime, limiting training.

All of these things will have an impact on our ability to launch investigations and complete them in a timely manner.

Sequestration does have an effect, we are a small agency.

90% of our budget is salary.

One of the keywords a safety.

Does that come at the expense of american safety wacko?

We are making do with what we have but i will say we are getting very stretch.

It becomes more difficult for us to launch, we are having to scale down the sizes of our launches, the types of tests we want to conduct.

It is a challegnenge and i think if we continue to face additional cuts the traveling public will not be served and safety will not be served.

We are going to have to let some things go.

We cannot do it all and we cannot do it with less money.

A gram outlook.

Thank you so much for the time.

Just ahead on the capital gains, the clock is ticking for americans to begin enrolling in the new health care law.

But will more delays given in the way?

We will get a check on the mandate.

And america's roads and bridges are in need of care -- need of repair but where will congress find the money?

Collects in less than two months, americans will begin enrolling in new insurance exchanges under the affordable care act.

Is the government ready for the rollout?

This week we learned that another key provision, one that was cashed out of pocket healthcare loss, will be delayed.

This comes after weeks after the administration pushed an employer mandate.

It gives employee years until 2015 to offer health insurance to their employee years.

It maintains it will be ready by the fall.

For more i am joined by jonathan gruber, he helped shape the individual mandate and was a key architect for massachusetts health care law under former governor mitt romney.

Welcome to the show.

Thank you so much.

Let us talk about these delays.

Are you concerned at all that they are going to bolster republicans arguments, repealing or replacing the health care law?

Collects we are in an unprecedented situation here where the law is passed an opposition has slowed down.

Whatever the administration did, there was going to be opposition.

The administration has decided to focus its energy on the central parts of the law.

The things they delayed our peripheral, they are not central to the operation of the law.

The administration says it is better to take it -- to take criticism now rather than next year when the focus is on implementing the law.

This latest delay had been posted on the labor department website since february.

I think a lot of people are wondering what else is going to go unnoticed, what else is out there that is going to be delayed?

Collects it caused a popular attention a few days ago.

I think it just wasn't viewed as a very big deal.

This is saying for the very small number of people who have separate out-of-pocket maximums for medical and dental or medical and prescription, for the very small share of them that will hit the maximums, now they will have to wait one more year to get protection.

We are talking a tiny percentage of people.

If they ?re are big delays we would know.

So far the signals are that they are on track.

Repealing, reforming, and the funding, that is all going to get wrapped up in the budget debate come this fall.

We are seeing the pace of healthcare cost increases slowing.

Can you tell us why that is and what that is going to mean once the health care law really does kick in?

Co we have seen a slowdown in the health care law over the past three years.

That is due to the recession, the enormous growth in consumer cautionary -- consumers have more skin in the game and are using their health care more responsibly.

The third is the changes in the health care structure that has been motivated by the affordable care act, by obamacare.

It is catalyzed, reforming the system and structural ways that i think are paying off.

The implications are that it is good for everyone.

We are going to see a higher wage growth.

We are going to see a lower cost for obamacare than was projected potentially.

It is just a big win.

You are in the girl to the rollout of the massachusetts -- integral to the rollout of the massachusetts health care law.

Tell us what the white house is doing versus what you did in massachusetts?

It was an aggressive outreach campaign.

We ran ads on every red sox game in the summer of 2007. they say you have to have health insurance, get health insurance.

People went out and got it.

There was literally no opposition to the mandate.

Eagle went and got health insurance.

It brought in the healthiest people.

What does this imply for the national law?

I think it implies heterogeneity.

States are working really hard to make the law work, making their exchange is functional.

We are going to seek enormous success and reduction -- let me ask you, you have consulted with a number of states as they have set up their exchanges.

What should consumers on the ground in some of these states, wisconsin, maine, colorado, what should they be expecting on october 1? collects the main thing is you want to recognize that for most of -- the main thing you want to recognize is that for most americans nothing changes on october 1. the idea of this law is that people were happy with their healthcare will be left alone.

Most americans will not see anything change.

If you are someone who is offered insurance by your employer or government, nothing changes.

What you will see is new insurance options and subsidies to make them affordable.

Collects think -- thank you very much.

Just ahead, democrats and republicans agree on the need to upgrade the nation's aging infrastructure, but not on how to pay for it.

We will examine one way that taps into cash that companies are keeping overseas.

Drones were sent into washington this week, we will give you a peek at the latest technology.

Wee infrastructure is a key ingredient to a thriving -- we know infrastructure is a key ingredient to a thriving economy.

That is why the united states became the best place to do business.

Over the past two years many folks in washington have been cutting these investments.

The world cannot wait for congress to get its act together.

Building roads, bridges, and highways are popular on both sides of the aisle, but with shrinking budgets, can washington agree on a way to pay for it or will we keep falling behind competing economies, like china?

There are more than 4 million miles of public roads in the united states, and more than 12 million tons of freight and 128 million commuters each year.

Almost one third are in substandard condition.

They provide stress on cards and reduce fuel efficiency, costing drivers annexed to $335 per year.

If it were to katie -- were to decay worse, it could jump to $470. roads get expensive the longer they deteriorate.

Roadwork also increases traffic congestion, which already cost the economy $101 billion annually.

The federal highway administration says it would take 100 $70 billion per year to significantly improve the nation's roads but it is red locked in a cash-strapped congress, who looks unlikely to open its wallet and a new highway bill is not due until 2014. frustrated states have begun to pick up the tab on their own.

Two dozen are debating higher gasoline taxes, increased tolls, and increased transportation fees.

Return to analyst, evan krohn.

Welcome to "have it ok and your coke you just wrote a report on infrastructure and how to pay for it.

-- welcome to "capital gains." you just wrote a report on its structure and how to pay for it.

The bill we looked at was won by or present of john delaney.

He cannot with a proposal a couple of months ago that would use repatriated funds to help pay for infrastructure banks.

Taking the money that corporations are sitting on overseas, how much are we talking about?

We are looking at $50 billion to be put in this infrastructure bank, which would level up to $750 billion.

With repatriation tax holidays floating past couple of years, it is pretty controversial.

What happens the last time we had something like this?

The last time we had this was in 2004. there was a repatriation tax holiday that cost $230 billion back at five and a quarter percent tax rate.

The idea was that it would spur investment and job growth in the united states but academics found that it had no actual impact on either investment or job creation.

Most of the money was brought back and just given back to shareholders.

We explained a couple of weeks ago, the president proposed using the money and revenue from business tax reforms to put in an infrastructure mecca to pay for new jobs here at home.

The white house is very careful not to use the word "repatriation tax holiday here go talk about the other proposal -- tax holiday." talk about the other proposals.

Where do they all come together?

It would be more akin to a tax holiday in that it does not require companies to bring money back.

They have been incentivized to bring money back at in exchange for that they would pay -- they would invest in infrastructure bonds to see this bank.

In president obama's proposal, this would be a required shift.

You shift to a situation where companies would only be taxed on earnings they make in the united states, which would be a territorial system.

Basically, the shift to that, all companies would have to pay taxes on the investments and earnings they have invested overseas.

It would be a full requirement for companies to do that.

Will this get wrapped into the debate on the follower of business tax reform generally?

I think there's going to be a aid battle over what you do with the money you get from this initial shift.

If all companies need to bring their money back or at least pay taxes it will definitely reinvest their earnings overseas.

There will be a lot of money to basically use.

The question is do you use it to pay off the deficit, do you use it to invest in things like infrastructure, or do you potentially do something like using it in a revenue neutral way and give it back to companies?

There is going to be a big debate.

We look forward to it coming this fall.

When we come back, grown makers want you to stop using the word "drone turcotte -- "drone." the obama administration's count of terrorism policy, the drone industry wants to let you know it's softer side.

You may think of unmanned aerial vehicles targeting militants and battlefield, what you might not expect our underwater vehicles used for fish farming or even drones delivering food to your doorstep.

Here are some ways trona makers are looking to go beyond the fence to opportunities here at home.

-- beyond the fence to opportunities here at home.

Aerial drones, underwater robot, and land-based on manned vehicles.

They are looking beyond defense applications and toward the commercial market, fighting forest fires, search and rescue missions, and even delivering pizzas.

The faa has already certified to unmanned aircraft for civilian use.

The market we see certainly includes the gas and oil industry.

There are a lot of other markets.

We started the company based on the fishing market and being able to track schools of fish for fishermen.

In law enforcement there are lots of uses in search and rescue.

Collects gathering fans -- collects gathering fans and foes alike.

We are opposed to killer drones.

Collects the drone industry has an optimistic outlook showing that the unmanned aerial vehicle market will reach $80 billion in the next decade.

Collects the comp -- the conference was put on play the top sector group, the association for unmanned vehicles international.

The media that were there covering it, the wi-fi password was "don't say drones." i am julianna goldman in washington.

You can join the conversation on twitter with the hashtag #capitolgains.

We will see you next sunday.

It's the biggest restaurant chain in the world, feeding 69 million people a day.

We are a lightning rod.

Because of our size.

The food is fast, but what mcdonald's serves up takes years to make.

We go inside the golden arches.

To find out what is in the secret sauce.

And, how a restaurant built on burgers and fries stays competitive in a world of changing appetites.

Two all-beef patties, lettuce, onions, pickles, on a sesame bun.

It is all real food.

Mcdonald's raised its golden arches in des plaines, illinois, 1955. first-day sales totaled $366. its famous hamburger sold for only $.15 a patty.

Today mcdonald's feeds over 25 million people in the u.s. daily.

It is also a global brand with over 34,000 restaurants in 118 countries.

Every day customers eat up 9 million pounds of french fries, equal to the weight of 900 elephants.

There are over 145 items on the menu.

It is the big five that bring home the bacon.

Big macs, quarter pounders, mcnuggets, fries and egg mcmuffins account for 25% of sales.

More americans visit mcdonald's than any other chain of any kind, including walmart.

And it has the grocery list to prove it.

Let's start with the fixins -- 43 million pounds of tomatoes, 102 million pounds of lettuce, do not hold the cheese.

Mcdonald's buys 231 million pounds of cheese a year.

The yearly tally that adds up to $9 billion.

That is $3 billion more than the military's food budget.

And they have a bigger workforce as well.

Mcdonald's employs more than the army, navy, marine corps, and air force combined.

40% of our executives at mcdonald's started as hourly employees.

Over 50% of our franchisees, those that own and operate restaurants, started as hourly employees.

There is no other institution that i know of that can boast of those kind of opportunities and success stories.

At mcdonald's, what we are about is making sure that regardless of where you came from in life, some of those people i mentioned have high school diplomas only and some of them have their mba it is a diverse pool, but every last one of them has the opportunity to show what they can do in the mcdonald's environment in satisfying customers and building this business.

Mcdonald's stands for opportunity.

Always has.

The company has been under fire for this financial planning website.

Former mcdonald's employees have said it shows that mcdonald's is out of touch with the minimum- wage worker, that they do not understand what it is like to live on minimum wages.

How do you feel about that?

That has been out there for five years.

This website has been out there for five years.

It was intended to do something very simple.

To help somebody who might be entering the workforce for the first time or someone who had not really had financial planning or management practices to be able to help manage finances.

When i was at a younger age, i did not know anything about financial planning.

I would've loved to have had something to guide me through.

That was what the tool was all about.

There was a comment about there were two line-items -- they were saying, $20 for healthcare is unrealistic.

The two lines for income were going to say, if you have a spouse or significant other -- a two-person household?

It was intended to be a tool to help a person plan, regardless of what their demographic was or where they came from.

It shows it is difficult and impossible in many ways to live on minimum wage, and therefore, the minimum wage should be raised in the u.s. would you agree with that?

We have legislators and many people who will determine whether or not minimum wage should be raised.

If minimum wage is raised, we have always been an above- minimum wage employer.

We have always provided opportunity.

For us, whatever legislation comes, our franchise, our system will abide by the legislation.

We are about providing opportunity.

When we can be the entry-level employer, when we can provide the number of jobs we can at mcdonald's and we can help people to have viable incomes, we will continue to do that and provide opportunity so that a person can rise through the system and gain greater wealth.

When we come back -- this was about four years in the making.

We will show you how food goes from menu idea to the menu boards.

? four years.

That's how long it took to make this, this, and this.

There are currently 145 choices, all of which took anywhere from nine months to four years to go from idea to your plate.

Mcgriddles was huge for me.

Mcdonald's lead food scientist and the brains behind the all-encompassing breakfast sandwich.

They wanted a kind of platter idea where you have your sausage and eggs and we finally arrived on the hot cake idea in a more portable, fun way.

Getting an item on mickey d's menu is no easy feat.

How do you know when you have a new product whether or not you're going to be able to bring that up into, say, the top five.

It's hard to say what's going to be the next big mac and it's not until we get it into the restaurants and show how it resonates with our customers over time.

There are 45 members of the menu innovation team, people who spend their days conceptualizing and executing new menu items like the now-famous smoothie.

You push the blueberry- pomegranate smoothie button, you pick the size, and it starts making a smoothie.

Altogether it's about 30 seconds from the time you start it, pull the cup and pour it.

Smoothies are a trend in the restaurant world, making up 9% of all menus, but not all menu items have panned out.

In the past we've had pizzas, and mcdonald's and pizzas didn't go together.

There are too many other pizza options out there.

How do you know it's time to pull the plug on a product?

If we don't have something we sell a lot of, then the quality cannot be consistent in a way we're proud of.

Something they are proud of, adding fresh produce to the menu.

Especially apples.

That was a big deal.

Huge when mcdonald's got into that.

It took a lot of work to understand the different varieties of apples.

What ones taste good and which ones don't. what was the most surprising thing you learned?

How temperature-sensitive produce is.

How to ensure that you're in that zone of anywhere from about 36 to 45 degrees.

When you go beyond that, you have a lot of change in that product's quality and characteristics.

Mcdonald's buys more than 60 million pounds of apples a year.

Precisely why it can take years to launch a product.

When mcdonald's rolled out their wild berry smoothie, it took an extra year because they would have had to buy 30% percent of crops in the u.s. there are a lot of things we do we never thought we could have done before.

Like smoothies?

Like smoothies.

The menu has to be innovative and exciting while maintaining the heritage and quality and taste of our core values.

A blueberry pomegranate smoothie was something we never thought about 10 years ago, or wraps.

You will see some differences in our menu.

You said last year the menu to you seemed to lack a bit of energy.

What happened?

What went wrong?

I think that -- i'll say less than what went wrong, what didn't we do.

It's always about opportunity.

Some of the opportunities we had were some of the products around the world, like the mcwraps, which originated in poland.

To be able to come into the u.s. as a great entree and introduce new vegetables is phenomenal.

We want to focus on beverages, chicken products, premium beef products and innovative entrees.

That's why you see again egg white delight, the new wrap sandwiches, the smoothies.

Smoothies we introduced a while ago but we have to remind customers that we have real fruit smoothies, not just sugar- based drinks.

These are real fruit smoothies, pureed fruit.

Mango-pineapple, strawberry- banana.

Blueberry-pomegranate.

Really great additions to the menu.

I noticed you used the word "real" very emphatically.

Exactly.

People criticize mcdonald's food.

You hate it when you hear this.

They say mcdonald's is not real food.

How does that make you feel?

I visit our suppliers.

We have tremendously high quality proteins.

Our meats, cheeses, vegetables.

We have a huge grocery list which gives us two things.

It gives us leverage in terms of our buying power.

It's the reason we can afford to have our products at a low cost.

But why do customers say it's not real food?

It doesn't look like real food?

I say get to know who we are at mcdonald's. i can't indict a person for what they believe.

All i can do is say here is who we really are.

Your beef is 100%? yes, 100%. we do add salt and pepper on the grill.

100%. your chicken, that's really -- yes, it is.

Whole muscle, breast meat chicken.

It's in our nuggets, white meat.

It is in our grilled and crispy chicken products.

Is this why you're adding in egg whites, vegetables and smoothies?

Is that part of your emphasis on saying look, we're trying to offer more healthy foods at mcdonald's? we think health is going to be determined by the person who decides to buy that.

I will tell you, yes, more fruits and vegetables is part of our plan.

At the same time, a big mac, two all-beef patties, lettuce, cheese, pickles, onions on a sesame seed bun.

It is all fresh food.

So you lost 20 pounds while eating on the menu?

What did you eat?

I'm all over the menu.

Give me a five-day menu.

I'll have an egg white delight one day with canadian bacon.

Another day i may have it with a sausage patty.

Some days i'll have our oatmeal.

Everyone has to make their own personal choices.

I made a choice because i was traveling a lot.

A lot going on.

I said i got to get myself back into working out and i had fallen off the wagon so i began to work out more.

People, when they hear you eat at mcdonald's every day and lost weight, how is that possible?

Absolutely.

Can you understand why people would be startled by that?

Let me substitute mcdonald's for a second.

If i said i ate at a fine dining restaurant every night and i managed to lose weight, ok.

Now, if i'm out and i have a pretty big steak or a rack of ribs or something like that.

Great food.

If i'm having that late at night and i go straight to bed, i might put on a few pounds.

It's calories in, calories out.

You have to watch what you're putting in.

But i don't eat food just for sustenance.

I want something that tastes great.

I've been eating at mcdonald's for a number of years.

I do better when i'm eating at mcdonald's than when i'm off doing something different.

You're always going to sell french fries and chicken mcnuggets.

There's not a way to win the obesity debate.

Ray kroc said i don't know what we'll be selling in the year 2000, but we'll sell more than anyone else.

I don't know what we'll be selling in 10 years but it will be what customers want.

We are a restaurant business.

Customers are our business.

We have to take care of their needs, wants, desires.

But they don't want salads.

They want burgers.

But we still have them on the menu because there are some that do want salads and if we don't sell them in the traditional way, maybe we could sell them in a wrap.

When we come back, we find out what it takes to pass the test at hamburger university.

? it's called fast food, but what mcdonald's serves up is actually a product of years of research, whether the latest menu item or leadership development.

On the grounds of mcdonald's headquarters just outside chicago, hamburger university is recommended training for all the company's managers and franchise owners.

Mcdonald's co-owner ray kroc's commitment to employees led to the creation of hamburger university.

If we're going to go anywhere, we have to have some talent.

I'm going to put my money into talent.

A unique curriculum that combines homework with hamburgers.

This weeklong program puts its students through the paces in a way no other hamburger company does.

Hamburger u is not a cooking school.

On average each mcdonald's restaurant brings in about $2.6 million.

So its goal is to provide managers like kevin with real business smarts.

What's your goal?

My goal is to become an operator someday, i want to keep working up.

Fred turner, charlie bell and jim skiinner have all climbed the golden arches paying their dues in the kitchen before hanging up their aprons to become c.e.o. which means people like rochelle tandy could be training the company's next c.e.o. they have to think bigger picture.

A lot of times we get bogged down by the day-to-day, the big details.

It's about thiinking big picture and diagnosing your situation.

Please rotate.

That is a skill taught in hamburger u's classes.

Which gives students 20 seconds to conquer 36 scenario's in a restaurant.

Everything we do here they run into, whether it's a buzz that comes on the lot or a customer slips and falls or something burning in the kitchen.

You need that real feeling.

To be in the moment.

And anyone who thinks this is just a week off work, think again.

A week through hamburger u. gets you real college credit recognized by the american council on education.

Very good.

Nice job.

Can you see an improvement in sales after your managers go through hamburger u? what we see is better efficiency and management and yes, that yields better sales but it's about something broader at mcdonald's. you don't get a chance to become a restaurant manager until you have qualified by both in- restaurant training and out of restaurant training and education.

Everything from people practices, effective operational platform management, supply chain management.

Clearly, food quality and safety.

What it means to market locally.

What the local community means.

All of these kinds of things, strategic planning relative to how much labor you have in the restaurant, what food costs are.

All of these are things that our managers learn as they are developing.

You don't learn it all as a manager but as an assistant manager, as a department manager as you come through the mcdonald's system.

We're very big on education and ongoing education for managers and then as those managers move forward then to supervision and then up through the system and then ultimately our chief operating officer globally.

You travel often.

You travel less now as ceo than when you were chief operating officer.

In europe, things are pretty bad there still.

Some have said look, we're in a recovery in europe but you've said before i'm not sure if i see that everywhere.

Many of the countries across europe would say they don't necessarily see themselves in a recovery mode either.

I think the southern part of europe, clearly.

When you think about what's happening in spain, portugal.

Italy.

Jobless rates there.

Unemployment rates across italy or across europe, are on average above 10%. which is a big number.

Spain is about 27% unemployment.

The bigger challenge is youth unemployment is in the mid- 50%'s. you've got these challenges across europe based on the macroeconomic factors of unemployment but also austerity based measures.

Many of governments are trying to facilitate work through that.

Our business over there, again, we're gaining market share in many of the markets, despite contracting i.e.o. and consumer discretionary spending being softer.

Nonetheless, they're challenging environments.

We have to stay focused on customers, stay focused on making sure we have the right value and at the same time we?ve got the right news and premium products to appeal to customers.

This is a market share game now, and when that happens, we're at our best if we focus on the market.

There is a lot of competition overseas and china is a very big market, your fastest growing market.

Comp sales in the second quarter were down about 6%. k.f.c., yum brands, pizza hut, they've gotten ahead of you in market share.

How are you going to catch up in china?

China is going to be a growth market for us.

We've been gaining share back again in china.

Yes, it's been troublesome relative to what's happened with chicken.

There were two things.

There was an antibiotic scare, which was not a part of our mcdonald's system or our supply chain but nonetheless it impacts consumers and consumer psyche across china.

That was followed up by avian influenza, which was a much broader asian epidemic, if you would.

There have been a couple things like that now.

We've seen the avian influenza impact dissipate, which is great for the marketplace and we've seen customers starting to come back relative to chicken purchases but china is going to be a positive market for us.

We're not gauging our success in china based on someone else.

We have to gauge that based on how many customers come to visit mcdonald's. back in the united states, you have to continue to grow your market share.

Some of the wall street analysts said look, the company is so big that it's really going to take something to move the needle.

What do you say to that?

Everyone needs to keep in mind we grow revenues.

Not everyone is growing revenues.

Many are seeing growth in incomes, etc.

We grew revenues, income, earnings per share and we've taken market share and we've outperformed the competitors.

There are a few players in the market that are doing well.

We're one of the players that is positive and gaining market share.

I would say we're doing well in the u.s. relative to our own position.

Our business is a retail and consumer based business.

Every day it's slightly uncertain.

Customers come in with different expectations every day.

We have to be able to manage through and provide the things they want.

My focus is on these golden arches.

? . .

This text has been automatically generated. It may not be 100% accurate.

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