i'm becky quick along with joe kernen and andrew ross sorkin. we do have an all-star lineup of corporate leaders on top today, including auto nation's ceo mike jackson. we have rate van corporate leader turned investor steve case, former motorola boss, chris gal vin, lennar's stuart miller and aig's steve miller along with merck's ken frazier. as well as gerry lopez. let's get you up to speed on the day's top stories. we are two hours away from the may adp report. the economy probably added about 210,000 private sector jobs last month. also on today's calendar, april international trade. a revision to first quarter productivity, may's ism nonmanufacturing index and the fed's beige book. check out the futures ahead of all of this.

yesterday you saw a slight decline for the dow. that was breaking after broke a three-day winning streak we saw going on for the two indices. the nasdaq looked to be down 7 points, the s&p are 4 points below fair value. in corporate news, the in the in the is reporting that gm officials increasingly believe that ceo mary barra will be cleared in the wrongdoing in the crisis. the automaker's internal probe is expected to name individuals and departments within the company responsible for that delayed recall. the investigation will also recommend corporate and personnel changes. in the meantime, gm is apologizing to the families of accident victims who have received recall notices for the replacement of detect fektive ignition switches. some families who lost relatives in fatal crashes have claimed that gm should not have sent

them notices to bring in cars for repairs. andrew? it looks like mississippi is headed for a runoff in the republican race for senate. john harwood joins us with an update from jackson, mississippi this morning. good to you, john. >> good morning, andrew. late night last night. look, in this, the most conservative state in the union, the tea party still got life left. the republican establishment both here in mississippi and in washington was unable to getted that o-- thad cochran to that 5% last night. we have a graphic here with the numbers. just a 2,000-vote lead for chris mcdaniel. he's short of 50% because there was a third party candidate on the ballot. chris mcdaniels at 49.6, thad cochran just a shade under 49%. that means a runoff on june

24th. this is not what republicans who want to regain control of the senate wanted to see happen here, because if chris mcdaniel is nominated, there is some thought that the democrat, even in mississippi, would have a chance in this race, the former congressman is running on the democratic side and chris mcdaniel, allies of chris mcdaniel, the guy who finished a few votes ahead of thad cochran last night, some of his allies were implicated in an incident at a nursing home where pictures were snapped, felony charges associated with that case. and so this was not a good night for republican leaders in washington. but it was a good night for the tea party. >> okay, john, what do you think of this, guys? >> i don't know. i think this bird dog thing is exploding. i don't know what to think. every paper has a different angle, john. i know you're keeping up with it while you're down there.

john's more politics. but i think politics may have played into this a little bit. i don't know how -- this might have legs. and john -- >> which one? >> the bird dog thing. work with me for one second. there are -- there's a cynical view that maybe this initially the idea was that -- to sort of push back on the v.a. scandal by saying by the good feelings that come from bringing home a u.s. soldi soldier. the president's going to be making a speech coming up, i think, over in europe and it was -- maybe they were trying to tamp down the v.a. scandal. they did succeed in moving the v.a. scandal off the front pages but not in the way they intended, i don't think. >> joe, i don't believe those were connected. but you're right.

this has turned into a story which is about the opposite of what they wanted. you've got a lot of concern among people in the military, about this deal, about bergdahl, who he was, why he ended up in the hands of the taliban, about the price that was paid to get him out with the release of the five prisoners from guantanamo. it's a bipartisan thing on the hill, you saw dianne feinstein yesterday saying the law was broken and she was very unhappy about it. in fact, said when consultation occurred, there was an immediate consultation before the conclusion of the agreement that led to his release but when discussion of that occurred previously, as the administration alluded to, there was unanimous opinion against a deal like that. so this is a very bad story for the administration. >> a lot of different angles. >> it is odd, i have to say -- >> a lot of different angles, john. >> it's odd they tried to

celebrate this in the rose guardth given hguar garden given how it turned out. >> why? >> we always thought you don't negotiate with terrorists. that's number one. number two, like "the new york times" has already sort of in damage control mode in terms of saying you can't definitively tie six deaths to searching for this guy. but once that started happening, too, think how that infuinfuhr infuriates people. that's hard to do. i sort of appreciate the "times" saying that. that's the horrible part of the story if we lost six other good guys that hadn't deserted. >> joe, i'll tell you, i did talk to voters at a polling place yesterday about this subject. mississippi's very pro-military

state as the entire deep south is. and there was palpable hostility toward this idea. when i asked the voters that i was talking to, well, what about the idea that president obama said that we never leave a soldier behind on the battlefield, that was not persuasive to them because of the circumstances in which bergdahl left. >> there was hostility -- >> certainly among the military community. >> but there was hostility on the idea that bergdahl was brought back? i was a little unclear. >> there was hostility, becky, about the nature of this deal. you had people saying my kid's in the military. i think he should be tried for desertion. you had people saying how could they let these guantanamo prisoners out in exchange for somebody who left the base under circumstances like that. those are questions that certainly are being asked in

washington but they're being asked by people who are close to the military out in the country who don't like how this feels. >> totally bipartisan, too. this was the last way we wanted to get bipartisan. because i really can't see anything. maybe a little bit more but it is really, democrats, just as much as republicans. >> feinstein. >> and everybody else, too. just people in general. >> okay. >> john, we'll let you go. >> it's a big problem. okay. >> i understand he has to be somewhere. >> he never found a tie. >> i don't know where he has to be at this hour. >> he's out in the field as he pointed out. you can be more casual when you're out in the field. >> in mississippi. >> you can wear a tie or a jacket. >> is that the way it works? >> yes. >> i have no pants, either. >> are you wearing socks today. >> i have socks. >> good for you.

>> my little boney feet. >> were your feet slimy for the rest of the morning? >> i went home and put socks on. the consensus is that your feet weren't that bad. >> feet in general are gross. >> especially when someone is rubbing lotion on them with us right here. >> andrew, there is, as in the movie, it quickly turns into something more than a foot massage. not that there's anything wrong with that if they're both consenting adults. >> you can walk into a store and get a foot massage. >> vinnie vega says to samuel l. jackson would you give me a foot massage? he catches him by saying, of course, you'd never give another guy a foot massage. >> they should write the code on

human relationships. they had messed up views on the world. >> i could probably give you a foot massage. >> you say you'd do it for $100,000 yesterday. >> no, that's something even worse. >> that was not just a straight up foot massage. no. >> i forgot that part of it. >> we're pivoting according to the producer. we're pivoting, he's panicking. >> they are panicking in our ears right now. it's been a quarter century since the crackdown on the tiananmen square protest in china. eunice yoon joins us from beijing. eunice? >> reporter: 25 years after the crackdown, the economy here has changed dramatically but the political system is largely the same. that's really the legacy of 1989, in the runup to that summer of that year, there were pro-democracy students who marched on the square and they were demonstrating against communist party rule. but then on june 4th, government

forces came in and fired on those students and civilians and they ended up killing by some estimates anywhere between hundreds or thousands of people on that square. now, that day was such a pivotal event for china, because it really was a signal from the government that as much as it wanted to see economic reform, it would not tolerate political change. and that is really the main message that many people had seen here. so people are asking at this stage, as the country continues to deepen its reforms, will it really be able to keep the same political system? we've seen so far there's been a tightening of controls, president xi jinping has been consolidating his power, many people have said it's become even more repressive than in 1989. but at the same time, his government unveiled a wide ranging program to liberalize the economy. a lot of people have been asking can you really have bankers who can make commercial decisions if

ultimately the banks are controlled by the party? can you also have a silicon valley here as china wants to do if at the same time academic life and the internet are largely controlled. so that is really the big question that china has. it's a fundamental question for the future in the next 25 years. guys? >> eunice, thank you very much. yale ceo summit about to kick off here on "squawk box." this morning, management professor jeff sonnerfield will join us. and the biggest issues facing the silver screen when "squawk box" returns. okay, listen up! i'm re-workin' the menu.

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welcome back, everybody. yesterday you did see the markets sell off a little bit. stock markets saw the dow and the s&p 500 snapping a three-day winning streak. the nasdaq was down for the third day in a row. the dow was down by 21 points, nasdaq down by 3 points and the s&p 500 was down by less than 1 point. you see red arrows once again this morning with the dow futures indicated by 18 points and the s&p off by 3.5. take a look at oil prices. at this point oil prices are up by about 69 cents. 103.35 for wti. the ten-year note has been

incredibly interesting. it was up for four days in a row. >> not saying anything. >> it went rapidly, the yield is now looking at 2.58%. >> it was at 2.6 for a while yesterday. how about the way markets work, though? when it was 2.9 and tapering started, i said watch it will go down because it's the opposite. >> exact opposite. >> and then when it's 2.4, and we get a minus -- it's not because i know anything. you get a minus one -- the day the minus one comes out and you're at a 2.4, you know it's headed back up. >> the market confounds to most people. >> they do the exact opposite. that was my single best idea. single best. can there be more than one best idea? >> after all these record highs -- >> fresh record highs. >> fresh record all-time highs. >> new fresh record all-time

highs. >> we want to make it special, don't we? >> very special. we do. >> okay. it's hard to make the dollar special. >> take a look at the dollar because we do have an ecb decision this week. we have play her have told us this is very important because we'll see if the ecb can finally get the euro to come down a little bit. this morning, the dollar is up against the euro trading at 1.3613. it's up against the pound and yen. gold prices yesterday snapped a six-day losing streak after rising 60 cents. not massive gains. this morning, another 30 cents. gold has come under a lot of pressure. >> did you get eunice's tweet. >> did i not. >> what did it say? >> not surprising @joesquaw surprising @joesquawk, @becky quick, @andrew ross sorkin blacked out during our piece on tiananmen square. i guess they're blacked out on

twitter, too, aren't they? amazing. >> amazing how quickly they -- someone is sitting there. >> quickly, today is the 25th anniversary of the tiananmen square crackdown. >> trying to get it in. >> get it in, yes. >> is that on now? >> terrible pictures. our next guest by the way -- >> i can't believe it's been 25 years, honestly. >> our next guest, their company bought by the chinese. yale university holding its 77th ceo summit today in new york where some of the best and brightest minds have come together to tackle key issues. joining us now, jeff sonnenfeld. with us gerry lopez, the company i was referring to, ceo of amc entertainment. you may be blacked out in china right now during this conversation. >> we can talk about any topic you have in mine. we wouldn't be in china, our

parent company is based there. they're on their own chain of cinemas. we operate quite independently of them on a day-to-day basis. >> amc is a great model on how global commerce can transcend frictions and diplomacy. this is a great example of cross-border investment. it's been a win/win/win. >> thank you. yes, absolutely. i want to talk to gerry as a barometer, if you will, of consumer sentiment and where we're going in the economy. i noticed, gerry, that the price for tickets, movie tickets in this country has moved down, not up, in the past quarter. it went from $8.35 to $7.96. that feels like a first, excuse my ignorance because i don't follow it enough. is that new? >> it's actually a function of the mix, andrew. the prices is our business have been stable for the last couple of three years. and what happens on a

quarter-to-quarter basis is that the percent of the movies being shown in 3-d or the percent of businesses in i-max will drive the numbers up or down based on that. the truth is when you look at a ticket price today, the cost of going to i amovie today versus five or ten years ago, it's actually below the cost of inflation. so it's still a great bargain. it's still very affordable for a family to come out and when you see this, it's typically driven by mixed changes more than anything else. >> from a margin perspective, ticket versus everything else, what does it look like for you? >> for us, two distinct businesses. one business is inviting you to come in for a movie, the box office business, across all of the big exhibiters, that is typically a 40 -- call it 47, 46%, 47%, 48% gross margin business. gross margin. the other piece of the business

is the food and beverage, the concession stand or the dining theaters as we call them, the lounges in bars. that business operates at an 85%, 86%, 87% gross margin. about a third of the business is double the gross margin of the movie itself. >> right. jeff, congratulations again on your 77th summit today. >> thank you. >> if you were to list out one, two and three in terms of topic areas that you imagine and you have a number of big names, big hitters that are going to be there including gerry. i see meg whitman on the list, among others. what do you imagine the conversation will go like? >> if you take a look at the list that's there, meg whitman of hp, mike holman of jcpenney, you see a theme emerging. it has to do with the internal activists, how people have ficked out how to build a business for the longer term

without having to be shaken down by scare tactics, the sharknado syndrome. these are people who have been building tremendous value but focusing within. the basic theme of the conference is transforming with transparency. investing in innovation amid public scrutiny. how could i don't build for the long term? mayors from some 15 major cities feel short-term pressures. we take a look at financial issues. >> let me ask you about that. even though the activists may not already be in under the tent, clearly there's pressure as you're suggesting for ceos to act as if they are. and the question, therefore, becomes whether that is a good thing for the economy, whether it's a good thing for the markets. >> well, you know, i'm very sympathetic to many people who have been targeted, great firms of great leaders, that i think are being unjustly have a match

put to their leadership. mike allman was a poster child of that. it was crazy with big ackman. pepsico doing a tremendous job. nelson peltz is quite off his mark on that one. however, the research does suggest, some very good search, i have to admit from up at harvard, in the big picture of things, activist investors aren't necessarily a bad force in the economy. many individual cases, i think dan lobe has done a great job. we'll have ralph whitworth with us. we'll have frank lake of the home depot who has worked well and meg whitman. you can have constructive partnerships. >> let me come back to you on leadership. relating actually to the chinese. since the chinese have taken over your company, how has it changed from a management perspective? >> really not much at all, andrew. what the chinese allowed us to do when they bought the company memorial day of 2012 was really

invest back in the business. we had a strategy. we were somewhat capital constrained after seven, eight, nine years of private equity ownership. what they did is provide us the runway to let some of the ideas that are now coming to fruition really bloom. and it's worked really well. they gave us the cover we needed from a capital perspective, a year and a half later we were successful in an ipo of the company. this is a case, as jeff indicated earlier, it was a win/win for everybody concerned. their investment in our company seasonally doubled over the 14, 15 months from the day they bought it until the day we took it public. and today, we have an emerging segment of our business that is growing at much, much faster pace than the traditional business is growing. it's worked out really well. >> how many screens in china? >> they're adding about 30% screens every year. our own company has just over 1,100 screens. there's about 5,000 screens in

the country. >> before we leave you, since we all love summer blockbusters, give us your top picks, one, two and three and give me a dark horse to watch for. >> the top -- this is an american passport to guess what the big movies will be. we think the big movie will be "transformers," clearly, that should run somewhere north of $300 million for its north american box office. following that one is going to be a horse race, "captain america" did well, "dragon 2" will do well. you've had big movies in the ask the x-men" and "spider-man." the best part of the summer, it's ahead of us with the fourth of july weekend coming up. >> you don't have a sleeper for us? you get all the screeners, don't you? >> well, we get some.

this friday, "the fault in our stars" i think will be a sleeper. it's going up against tom cruise in "the edge of tomorrow." tom is expected to open somewhere in the $30 million range. we think teenage girls who "the fault in our stars" is really the target will prop that movie up to some number in the mid-30s. that could be a sleeper. "neighbors" was already a sleeper. >> "fault in our stars." okay. >> did you say 77th? did you say 77? he looks great. >> he looks great. >> 77th summit. you said it was his 77th summit. >> jeff, are you still there? >> you look great, jeff. >> he's been doing these things in new york at least twice a year, if not more -- how many times a year do you do these now? >> immodestly.

>> see you later, gerry. >> thank you. >> you're welcome. see you. >> jeff, i'm sorry. go ahead. >> thanks. >> we've started it when nobody was reaching out to ceos, they were a targeted, little understood group. ours are strictly off the record. we don't publicize them much other than with you folks. this is the 77th, microsoft, bill gates, we helped them launch them, start the competition. they need to learn from each other. not just go off the trade shows. >> you look really young. tell us your secrets. >> dan marino. it was a mistake. >> i don't think he realized he'd be listed in this case against the nfl. >> i was surprised. because he's still a pretty big -- he does a lot of stuff. >> he's walking a fine line. he's trying not to irritate the league. >> he wants to be part of it but -- >> he understands that the

players who need this should have that right. >> didn't mean to join the suit. lawyers are trying to figure out how it happened? >> he wanted to be able to come back. auto nation's mike jackson this morning, chris galvin, aig's steve miller, merck chairman and ceo ken frazier. first, though, what will the ecb do tomorrow? we have our first ever ecb results. as we head to a break, a look at yesterday's winners and losers. when you run a business, you can't settle for slow.

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good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. our top story this morning, the may adp report. economists are looking for it to show a gain of 210,000 private sector jobs last month. i know what you're thinking. you can't always count on adp. we showed you the chart earlier this week, they're close. they're close. the standard deviation.

is it less with zandi, the standard deviation? >> it was. >> adp is doing a little better with zandi. it's close enough to where you need to -- there was a time where we were almost -- not putting down poor joel but there was a time when adp had been really wrong a couple times, we felt like we couldn't count on them. this is an important one. we're supposed to get to 4% this year. >> right. >> in a quarter, not for the whole year. we're supposed to be ramping it up. maybe we're not, maybe we are. mike jackson might be able to -- if we do 17 million -- >> after looking at what the auto dealers said yesterday, particularly chrysler, if they are right, mike will have a good idea of this. he was warning before the holidays they shouldn't be producing quite as many cars. >> auto nation hit another new high, $58 a share now. in corporate news, i don't know if i would name this company this, nrg energy.

>> redundant. >> i understand it's like the license plate. you're an energy company. get rid of one of them. it's reportedly close to a deal to buy the largest wind farm in north america. probably getting a good deal. the bjornal says that the acquisition of alta wind energy would be worth more than $100 million. and pershing square hedge fund is up more than 22% so far this year, putting it ahead of most of its rivals. is valeant -- is allergan in there? >> allergan probably is in there. and they locked in -- they did it on a friday. >> that's a mark-to-market? >> this new announcement happened on a friday, friday night, i believe, partially, to lock it in for the month.

>> to market-to-market. is part of that allergan? part of that probably is allergan. >> i assume he wasn't doing great on herbalife. >> you can get good performance month after month if you team up? he can beat his peers. >> that is, i believe, true. as you know, i have a problem with this. >> i'm baiting you. >> he would say in fairness, it is possible allergan doesn't accept the deal. >> let's say you're trying to rack up the numbers. if somebody is going to make an acquisition before they announce it. he'll look like a genius. he wrote a book, market madness. it was all about how to pick takeover stocks. he was sitting there with that suitcase full of money finding out. >> as long as you sign a contract, that's fine. if you're walters or mickelson,

you get an investigation. >> phil didn't do that. i can't imagine. >> i'm not saying he did. i'm just saying, it's like one way you sign a piece of paper, the other who knows what happened. now here we are. >> let's talk about tomorrow's ecb meeting. it's taking on some more weight with several possible courses of action for mario draghi to take this time around. steve liesman has the results of the exclusive fed survey, the first ecb edition. steve? >> becky, we poll our panel of 30 economists, strategists and fund managers weighed in. the stakes are high for mario draghi and ecb, not because they're expecting something but they're expecting more than one thing. let's go through the results of the survey. what action will the ecb take in check all that apply, a long-time low rate, 65%, cutting the refinance rate, more than half, reducing the deposit rate, more than half. a long-term refinancing operation and even 30% coming in on qe. let's focus on these three

things in the next screen and show what's expected here. 55% say cut the refi rate, 52% say reduce the deposit rate and a third say ltro. move this over. let's show you what we're talking about in terms of the expectations. 65% expect one of the three. how about two of the three, 48%. nearly half expect two actions by the ecb, not just one. how about all three? 24% expect three of those three. let's move on and look at what they're looking for in terms of cutting the refinance rate from a quarter down to just above 0.1 basis points. 11 basis points. the deposit rate, yep, everybody thinks it goes negative, negative 0.10. the ecb will become one of the few central banks to ever post a negative official rate. 1.30 for euro is the forecast year end 2014. looking on, the economy, 1.1% gdp growth year-over-year and inflation well below the ecb's

target, that's the expectation out there, 0.7. by the way, this was done before that 0.5% came out. lynn reeser at point loman says monetary policy is approaching a critical split in the road as the ecb shifts to more easing, the fed begins to tighten and the boj maintains its current stance. i'll have more polling data over why u.s. yields are so low. >> what do you think the ecb will do tomorrow? >> i think they'll do the deposit rate and refi rate. i think they may hint at ltro. >> what is that again? >> long-term refinancing operation. they will send money against collateral for a long time. >> pull up a chair. >> i am. i'm sitting. >> i see that. >> that chair was there. >> ltro is essentially the bazooka? >> it's one of the ba tozookaba.

he's gotten mileage over promise to do something. >> that's what i'm saying. >> does he finally have to put up the money. >> the traction on inflation. remember, they're a one-trick pony. they have to get the target rate up to 2%. he has to get the euro down. that's where the track -- he doesn't have the traction. he's been unable to talk it down. he has to take actual action i believe. >> show me the money. >> to bring the euro down. and i told you that over the past two years, the central bankers that i talked to, the economists are like, i see going to parody. and it never happens. it's an issue for draghi in terms of turning around that economy. i think generating inflation. >> that's it? >> you're going to continue this economic discussion. >> you'll continue this economic discussion. >> can we? >> you got more? >> i've got a lot but i'm waiting to be -- >> you know david bursa?

>> i do. smart guy. >> chief economist and senior vice president at nationwide. let's talk mostly about what to expect today and on friday, david. where are you and are we on track for this uptick in the economy that we're all counting on? >> morning, joe. i think we are on track for the uptick. we're looking for the adp number, coming in up about 220 and the nonfarm payrolls just a little more than that, maybe up to 230. >> david, for my money, the interview of the morning is not me and it's not you. it's mike jackson. because here's what i want to know from mike after the vehicle sales numbers yesterday. not just about the sales pace. i don't think the 16.7 continues. when do we draw down inventories and does the production schedule change? do they ramp up production? what's your forecast and how important do you think the vehicle numbers were yesterday? >> steve, i think you're exactly right. yesterday's number was a one off. we got to almost 16.8 million.

i don't think that's sustainable. are we going to go back to 16 or go to 16.3, 16.4. if we can do 16.4 for the rest of the year, production schedules will ramp up, inventories will draw down. that will give us much stronger growth for the second half of the year. i think that's entirely doable. >> a lot of folks are concerned about inflation. it seems any tick above a tenth creates huge concern about inflation. what's your outlook here? 1.5% to 2% seems where we're going. there is some concern that it could go below 2%. >> if you look at the core rate, it's hard to see it go above 2% this year. i think the fed wants us to get above that 2% goal for a while. it's apparently viewed as a center point and not a ceiling. to get inflation above 2 means we'll have to grow the economy a little more. in the near term, i think it's going to be tough to get the core rate up to 2 this year.

>> david, i don't want to make this segment less exciting than it already is but one of the things that i find incredibly remarkable -- i find remarkable -- >> sorry. >> no, no. >> our viewers have seen -- you don't need to paraphrase. we're expecting it. >> it's the incredible unanimity about policy that extends not to year end but really into next year. when i look at survey results, everybody is in pretty much agreement they end qe this year and in pretty much agreement that the first rate hikes come, sometimes second quarter of 2013. our results say it's more august than july, not a big deal. now our new number is 0.7% for the year-end 2015 fed funds rate. is there a debate out there that i'm missing or is this a time of extraordinary consensus about fed policy? >> i think that there's tremendous consensus right now.

in part because the fed is giving us pretty good guidance on what they're going to do. in the past when the fed has been less cleared, there's been more uncertainty. economists have been much broader. the fed is telling us what they're doing to do. >> the only thing that upsets that is if incoming data comes in unexpectedly. i don't remember a time for the next year and a half people are on board the way they are right now about what's going to happen. >> all right. >> thank you, steve. >> thank you. david, thank you. >> thank you. >> that kept us all awake. still to come on "squawk box" -- >> go ahead, throw it at him. >> here we go. >> i don't want to rub off on you. from a diverse set of industries all ready to give us our take on the business, what's going on in the economy. mike jackson, steve case, motorola's former boss, chris

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welcome back to "squawk box" this morning. see how the market is setting itself up for the day. not well at the moment. the dow looks like it would open down, off about 13 points. the s&p 500 off 3 points and the nasdaq off 5.5 points.

>> this is a good tease. coming up, what ceos really think about the executive compensation -- >> you seem very excited about this. >> let's ask them what they think about this. they think it's way too high, all these ceos, executive compensation. they're furious about. >> i suspect you will find a more nuanced -- >> jeff wants to talk about activist investors and how you build a company for the long term with all these activist investors trying to get you focus on the short term. >> andrew will be part of this. honoring america's troops. which is actually quite fitting because geico has been serving the military for over 75 years. aawh no, look, i know this is about the troops and not about me. right, but i don't look like that. who can i write a letter to about this? geico. fifteen minutes could save you

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fidell. welcome back, everybody. today's theme is transforming with trance parency, jeff sonenfeld is the dean for the executive programs of the yale school of management and a big cnbc contributor. i know one of your focus is how a ceo builds a business for the long term when activists are buzzing around trying to make you focus on the short term. >> that's exactly right to make people feel better about themselves with ve a group of mayors from major cities, nashville, oklahoma city, a host of the great cities, albuquerque where they are under such intense pressure the ceos are

feeling good about themselves, when they innovate, talk about being an a a short leash under public jewettny, on a cross section, meg whitman of hp. mike ulman of j.c. penney. we will kick off with your friends to recap some issues there with greg fleming and for chris dodd to see what progress have we made. phil donaldson, the 24ing sec exchange commissions chair and richard breedan and have a food fight on whether or not it's tougher at wall street. is the scrutiny tougher there? >> jeff, is it something that ceos are concerned about? are they worried about the activist investor? is it something that strikes fear in the board room today? >> it's one of their top fears. it's difficult.

i have been doing this stuff a long time. hopefully, it doesn't show. but the fear used to be when i started out, you did have a lot of crony board and entrenchment issues. for the most part, that's gone. you actually do have boards that are really attentive to the outside. we have some, most of the places are pretty well governed and trying to make investments for theening loer term is hard. some retailers, i mean, there is no surprise why mickey drexler felt he had to take j. crew public or michael dell. we have been talking to michael dell a lot lately about some of the things he's doing. it is easier for him than meg whitman or anybody else trying to transform tear businesses under the short tiexting clock f our investment world. the saving grace or soes. >> what are soes? . >> they're modeling, several soes here. >> what's an soe?

>> state-owned enterprises, sorry. the big state-owned enterprises in coin are looking to a good modem. they're put on short-term leases for turn around now. great companies, instead of investing massively in chemicals and things, they're into land deals and all the rest, cyto chem is one of the biggest land developers in china. they're getting caught up with the seductive terms of short-term pressure as well. >> jeff, let me ask you about ceo pay. is this an issue the ceos are sensitive about? it certainly has made its way through the media. >> they start to see the veins bulge at the neck. we l. there is a piece you saw in the "wall street journal" yesterday, they wrote on looking at ceo compensation. the bottom lean on that article, by the way, was there were a handful that account for most of the gains. modest gains over the last year and trailing shareholder returns and trailing corporate profits on average. so, in fact, it wasn't outsized

overall, you bring up the topic. we will have joanne lubic with us and cnbc journalists. we raise these issues that, i don't like it. part of it is they are tired of being scapegoats of somehow of being villified all the time. the ceo pay issue, yeah, it's a hot issue and there are some outliers which are the problem and there are sometimes confusing met recs. many are underpaid. you look at ubs with soaring performance, they're in the bottom quartiles. >> i know you have an incredibly busy day so good luck with all of the things you have going on today. we will see you again very soon. >> thanks a lot. coming up, the parade of business leaders continues, our guests include motorola boss chris galvin and aig and merck. we got a lot coming up.

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good morning, everybody, welcome back to "squawk box" on cnbc. i'm decky querk along with andrew ross sorkin. there have been modest declines so far. those have backed up a bit. you are talking about flat lining, the dow below 4 points per value t. ten-year note, the yield at this point at 2.5 eight%. you are talking about a pretty quick return just over the last four days or. so we also have a busy day for economic numbers as we get set for the wednesday session. at 8:00 eastern time, we get the may report private numbers. economists are looking for

210,000 new jobs for may. this afternoon we get the fed's latest beige book. japan's dichi life, this is the largest ever acquisition by a japanese insurer. reports of talks between the two came out earlier this week. they are based if birmingham, alabama. the united auto workers raised do yous by 25%. this is the first increase in dues since 1967. the uaw made the move to replenish its strike fun. do yous will be two-and-a-half hours of regular pay up from two hours before of their regular auto pay. >> in auto news, gm officials are said to increasingly believe ceo mary barra, the internal probe expected to fame individuals and departments within the company responsible

for the delayed recall. the investigation will also recommend corporate and personnel changes and then in other gm news this morning the auto maker apologizing to families of accident victims who receive recall notices for replacement of defective ignition switches. some families have complained gm should not have sent them notices to bring in cars for repairs. then there is tesla ceo elan musk. he plans to run the electric car maker into 2018. they held a shareholder meeting yesterday. there was no major news, there were interesting exchanges. one shareholder asks for a vice chairman. another one said he made enough money in day trading tesla stock to buy model s. there was one of the youngest shareholders in attendance who askings for a tour. >> i'm an 11-year-old from burling game. i invested in tesla last year as

my first stock [ applause ] and i was wondering if i could have a tour of the factory. >> absolutely. just hook to a tesla person afterwards. we will make sure it happen. >> they are going oh the shame the shame. u.s., let's talk autos. u.s. auto sales surged in may, consumer demand continues to thaw. mike jackson ceo of autonation. good morning, mike. you know, i hate when they write all this stuff for me. here's how i want to start with you. how are you, my friend? >> i am fine, my friend, nice the see you, becky, today. >> the fed has figured out maybe all this easy money has caused volatility. we seen all these guys saying you can't make any.the reason i'm saying this because there is no trading, sometimes in a

crisis, there is, the lowest was five, wasn't it? >> it was actually under $4 a share in july of '08, i seem to recall. >> so the opportunity that's created. you need some -- you can't just get stuff for $4 unless there's other things happening and if we get for the volatility, no one can make any money, that's why goldman is having problems. citigroup mentioned it, too. >> i think the volatility in '08 -- >> might have been extreme. >> i might not be looking forward -- >> tell us, this is just a way to intro you so you can tell us about your most recent results in sales and everything else. >> may sales results were excellent. for auto nation we retailed over 30,000 vehicles, that's a 15% increase and for the industry, the selling rate for the month

of may was $16 million 800,000, an 11% increase. now, few recall, joe, when i reported march's sales, i said, listen, the first ten weeks of the year were horrible because of the weather and we would have a strong spring market because we had the normal growth that i forecasted plus recouping what we missed in january and fed february. >> is this just a big boom of a month because you had so much missed opportunity? can this continue in june, judgment, august? >> here's the way i look at it, beck years i forecast the year wield increase 3 to 5% to take us over 16 million. with renow year-to-date plus 5%. so we are exactly where i thought we would be. >> don't you get excited over those numbers? >> it's unsustainable. sometimes you have a pull forward. sometimes you are reaching back to recover numbers. which we had in may. that means they will sell 16 million units this year up

3-to-5%. i expect we had ten awful weeks, ten fantastic weeks. june will start to move back to a more normal selling rate for the year. we will sell over 16 million this year, we'll break through. >> is that a 16.5? a 16.8. >> i told you that in january. >> you said 16. >> over 16. >> 3 plus. >> 3-to-5% which is where we are year-to-date. >> in the dark years, you were hovering and quivering and quakeing, what was the low? >> the low industry selling rate was down to 19, joe, which was for the full year '09 was the worst, that was the bottom, just over 10. but you had individual months that were down to 9. i would describe it this way t. normal sustainable rate for industry sales is between 16 to 17 million. you take the scrappy rate the household the industry. a recession, a bad recession is

13 to 14 million. 9 is a great depression for the auto industry. we had a recession. >> does 16 or 17 million a pace given cars are given better and better quality, they last longer? . >> that's true. can you taking off the roads 13 million units a year scrap. a million new households to a million, five new hold holds formed in america each year. you need a car to a car-and-a-half per household, you come to a sustainable rate between 16 to 17 million is the run rate. if you are above that. >> your household is a zero household when it comes to cars. it's a metrosexual in new york city. >> he rents limos? >> no, except -- you need one to two to the hamptons, you would get a zip car? >> i would get a zip car. >> or a helicopter car. >> or an avis car. >> andrew is clearly not the

norm. >> not anyway. >> when you do these things, you throw out the extremes. >> the city dwellers are not the norm for this most people in new york city don't have cars. he's a multi-media brand, he's 37-years-old. >> he started at the fork times when you were 15, 16, something like that? >> movies, tv, box. >> enough about me. why don't you talk about she in. >> let's talk about factors, gm has a 12% increase so clearly the consumer has not lost confidence in gm products and gm grades. >> automatic people that walk into show rooms are not concerned about any of these things? >> force i think there are two factors. one the controversy is about vehicles for the longer in production that are very old, that are on their third or fourth over. so it's far removed. second, what happened is absolutely awful, inexplicable. we still need answers. but i think mary barra did two

very important things in bringing in kenneth feenberg and anton volukas, who is pim ars of integrity and said, these gentlemen are going to work with general motors to get to the bottom of the truth and to do what's right for the victims of this situation. and i think that brought time until we get the results of the report. i think the results of the report are not going to be pretty for what happened in general motors. something went terribly wrong. mary has already said that, herself. and measures will have to be taken that it never happens again. but the consumer of today believes in the renaissance of detroit and still believes in general motors. and if they manage their way through the rest of this crisis, appropriately, gm will be fine and if i look at chrysler, their

ram and jeep business, jeep business was up 50%. they were on a roll with their truck business. it's absolutely amazing. i think jeep is going to bam global brand. sergio's plan, i think the most doable part of that plan is to take jeep on a global basis. it's a likable approachable capable brand that they're going to take around the world and ford, you know, their number one vehicle, the f-150 is being replaced with the all alluminum one, a passive production on the production side. i can't begin to describe to you the transformation that has to happen in plants. it's a completely different production technique and they're going to have to very carefully manage their availability the f-150 to run out of the existing ones and start up a few one. >>er you think it's an awesome car? >> i think it will be an awesome success in the marketplace. i tell you, to produce it in volume, it's never been done before. >> what do you worry about now?

>> dolphins. yeah, because of the screen, too. >> you talk about marino a little later. we'll get back to that. but for gm, just one point, i don't think anyone thinks gm cars are crappy. they're mad at the way the recall was handseled. the malibu, some of these cars are good now. so it's like a weird stick ma gm has right now. it's about how they hand him what they should have stepped up to the plate. but it's not that the cars are crappy. >> in the consumer's mind, there is a clear bifurcation of old gm, new gm. >> what is that the cobalt? >> cobalt. >> do they sell those anymore? >> and other variants. there is a clear bifurcation in the consumer mind and they're going to give the new gm a chance and if they handle it appropriately, there will be no damage, permanent damage to general motors. >> new ceo. i'm sorry, what was your? >> we will do it after the brake

because i want to give you a foot massage during the break. >> during the break. >> i'm excited. >> close my eyes. >> the viewers witnessed it yesterday. when we return, that foot massage plus much more of our exclusive lineup, plus motorola ceo and aig's steve miller. 8:00, merck's ceo. first a massage. i don't know. >> but first, we should tell you a revolution is coming to the lunchroom, everybody. steve case, he's going to talk about his latest investment to raise the bar for school meals when "squawk box" returns right after this short break. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ]

[ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪

welcome back, everybody, dow raised the dividend to 37.5 cents a share and approved a 1 million buy back program. >> that stock is up just over one and a quarter percent. >> investor steve case is adding another company to the revolution growth fund. he joins us on the set along with the ceo of revolution foods. that's a different company by coincidence shares the same name revolution, have you had issues?

in there no, but it's great that we can finally unite the revolution. we started the revolution in 2005. kristen started revolution two in 2006. in 2014, we are coming together to make sure every kid in every school has a healthy lunch. >> that's like when arm and hammer bought every arm and hammer. he did. arm and hammer. 16 years ago, i think. he did. >> is the issue around better nutrition on the food and how much is it about doing that in a cost effective way? because that seems to be the most complicated part about this whole situation and finding intoed that actually kids are going to eat. >> exactly t. school lunch business is a $16 billion business, revolution foods is already a $100 million business. there is traction in schools. there is clearly expansion. the opportunity brought healthier foods that kids love schools can afford. that's what revolution foods has been able do. >> there have been some

stumbles. michelle obama pushed. people talked about this a lot. it's back fired t. kids aren't eating. they were going on after cool to go to mcdonald's or do whatever or they're not eating enough. what do you do? >> we have we are data focused foods at revolution foods, for eight years, we've consistently had strong year over year growth representing the demand that's there for a healthy offering also an affordable offering and a kid loved offering. so i'm the mom. >> what are kid loved offerings? >> right. i'm a mom. i have two little boys. i always joked we are constantly, my co-founder and i are designing in schools through gathering kid insight itself and helping create our food. we do that when we get home as well. so we recognize at the most important point that students have to love the food. >> i can't getpy son to eat green beans. >> it's a good start. >> these are available at safeways all over. >> so here we have, this is a

cheese pizza meal kit right there. right there is a ham and cheddar meal kit. so far, i don't see veggies. >> it's available in grocery stores and our school meal offering is a fresh meal offering that contains fresh fruits and veggies with every single lunch and supper served to kids. >> what are the veggies? >> we have great luck with carrots, broccoli, great luck with greens. we're starting to have great luck with green beans, actually. so we present a lot of variety him then our fruits, we're serving ample pieces of fresh fruit per week to a thousand schools. so a lot of luck with our fruit and just presenting variety. >> what's the cost per meal? what are most schools paying per meal? >> so the schools that we're serving primarily 80% of the students are on the free or reduced lunch program. so meals need to be within the national reimbursement rate.

>> what's that rate? >> on the lunch level, about $3 per meal. >> what's the mar jen for you on a meal lake that? >> very much varies across depending on volume, depending on the customer we are serving. >> this is like the schools are you in, do the students have choices? >> they do. >> your program and the normal program? >> well, so, in the schools we are serving, we are typically the sole choice. in our offering, we have multiple choices. again, we are designing. we come out with 80 menus, both hot and cold. we come out with new mealles all the time. we like to offer variety every single day. >> they have a food fight in washington, d.c. over this idea of school lunches. in reality, everyone is in favor of the great lunches. can you create things affordable to schools? kids love that are tasty? >> what's the answer, should the government be spending more money on food programs? schools? >> i this i the government

already spends a lot of money about $10 billion of the 16 billion is come sfrk the government. it's not just about people eating healthier foods, it helps them learn and starts building habits that can last a lifetime. we have a health care problem in this country. an obesity problem. when kids go to school. they should learn healthy options from revolution foods. >> i'm not suggesting we should spend more necessarily, i'm trying to figure out. i imagine you think we should spend more. what should we be doing? >> the beauty of what we have been doing eight years, at scale, serving over a million meals, we are operating within the reimpercentment system. so worry not asking schools and familys to make the choice between healthy and affordable eating and dishes eating. we represent the intersection of that. >> scale is important. >> scale is important. it's really allowed us to leverage our production. you know, work to create -- >> they are building out if

regions, can you have seven cull fare centers. that's how you get the fresh food to theles 62. you have to build a regional strategy. the government doesn't ned to do anything. they already have a program if place. it already exists. it works pretty well. all of what's happening here is ent (fu-- entrepreneurs are com to the rescue. >> what's the question, do you have lots of demand from school and you have to ramp production or do you have to go if and convince schools you should do this? >> actually, that's a good question. that's why we are here together today. we simply needed the right partnership to basically powersmart all the demand that we are finding and that we hope to achieve. we are just at the tip of the iceberg in terms of how this concept owe glow do have you competitors? i assume like a cisco, things like that? >> well, certainly there is the aggregation of a lot of food in schools right now. schools are doing different things to solve this problem.

it's a varied peck trum, revolution foods is the only national provider at scale. >> people are locked into contracts, so it's hard for to you get in? i assume there has to be a lot of lobbying, i don't know if we call it lobbying, back room negotiating in some of the schools? >> well, it to be a tricky system for sure. but these contracts are renewable each year for the most part. and what we do is really work with schools to help complement the system and get parent and families excited about it. >> moms are really the biggest lobbyists on behalf of us. right now we are already in a thousand schools. >> it says fruits were invented because they're better than vegetables. artists have pantied fruit for years because you can pick them up. no one is going to come over and take i want away. put a do is nut, it will be gone, the next time you come in, the fruit will never disappear.

>> coming up. >> pizza, do what are you doing, may-n-cheese, hams, if the kids don't eat it, what good is it? >> the kid eat it. >> you have said you like -- >> you are weird and that is bad. coming up. >> i like pizza. >> i like pizza. i'd like beets. i eat beets salad. coming up, data point.

. >> coming up in the next half hour, more to have our exclusive yale summit and motorola chief chris galvin and challenges in telecom. it's miller time, stewart and steve miller from aig. stick around. ""squawk"" will be right back.

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welcome back to "squawk box." mortgage applications declining 3.1% in the week a. spike the average rate for a 30-year fixed mortgage 4.26. also the global markets paying close attention to tomorrow's ecb decision. an exclusive survey finding 65% of those polled expect the european central bank to take at least one of three actions lowering the refinance rate causing the rate or announcing a

long-term refinance operation. the g-8 summit begins in brussels. the first time if eight years, russia not taking part. they left vladmir putin out of the talks for retaliation for his actions in ukraine. we are continuing our coverage of the yale summit in fork. our next guest led a dot-com boom in the late '90s. chris galvin is chairman and ceo of harrison street real estate capital and former chairman of motorola mobility. chris, thank you so much for joining us today. >> glad took here, becky. >> it's a huge shift from real estate to technology, what led you to make that move? >> well, we had to take the opportunity to start over. we loved what we were doing and organizeing all the people and innovation, but when all the events happened, we decided we'd start over. so we funded a real estate

private equity company. we applied quality. we invented that a motorola to design a private model. so far it's worked out well in ed quakes, health care and storage. sort of steady demand, real estate, regardless of whether the economy goes up or down, people need those, they need to go to the doctor and get educated and so it's turned out quite well. >> i do want to talk more real estate. before we do, let's talk technology and what happened. google sold it for $3 billion to lenovo. why do you think they turned around and sold the business? what happened? >> i think what they discovered in that set the of transactions, they were primarily looking for intellectual property. they are trying to pack 20 pound of technology into a one pound little sack in a mobile telephone is an extraordinarily

complex and difficult things to do. in that hardware side of the business, it's very complex. they ultimately determined they got what they feed, the intellectual business and moved it to chosen and hopefully they can take what is a good brand in coin, the motorola brand and make something out of it. >> what do you think some of the players are doing? apple had big anounbig announce? >> they have what i describe is the apple ecan system. you see jobs orchestrated. a combination of end-to-end solutions and elegant hardware designs and they are followers. their customers love that. so they keep adding more functionality it to. i think their software announcements were terrific. i suspect they will come up with nifty hardware here mid to end of the year. >> chris, you tried to hire tim

cook at pun point, didn't you? >> i did. i think he is a superb operative. he has excellent knowledge and performance in this case. he has turned out to be a fine junior ceo of apple. i think a lot of tim cook, he's quite a substantive person. >> chris, there is a lot of speculation there might be a deal between sprint and t-mobile. this will take place at the same time they are mergeing with direct tv, time warner kaim cable with comcast. i wanted to get your views on all three of those mergers, to tex tent you can talk about technology where all this goes, they may all be in the wireless industry in the end. >> i think the better matchup is at&t and t-mobile. the technologies were much the same. in gsm and the other combination, it's a little more complex. you can find a way to evolve those networks. what brian roberts has done at comcast is smart scaling. that interests key. he needed an enormous amount of

cash expenditures to build out those with high band width and serve those customers. a lot of those transactions make sense to get to scale. >> competitively, you are good with it, you are okay? >> yes. again, what the consumer is looking for is very, very good coverage if wireless, deep into buildings, not missing any calls, not missing text message kind of thing and media business, they're looking for lots of programing, lots of content. then, of course, they're bringing telecom systems like comcast, so i think it makes a lot of sense. >> long term, i don't know what that is, five, ten years, do you think we will be able to get brond band speeds today wirelessly everywhere? so you will be able to get tv completely without wires? >> well, i think in all of the let's say 250 major smsas, the metropolitan areas, i think, eventually, yes.

trying to bring that band width dmeep buildings is a challenge. you have to do a lot of wifi link up, wireless is complicated in that regard. they will build them up. that's what the consumer wants, lots and lots of how you communicate with people in content is the going global. >> chris, mike jackson, good morning, how are you? >> all right. >> you were brilliantly leading motorola. it was doing de phenomenally, inexplicably, they forced you out, with time, have you been able to come to terms with that or have any additional insight? this was a business founded by your family and you had it rolling? >> well, yeah, mike, thanks. we have the same business council. you are doing a great job. i'm glad the consumer is buying a lot of cars, which is terrific. i think the answer is, it was just a dimension of impatience. i think most of the folks who were involved on the board at that point in time would look back and say, it was probably an

ill timed move. about ten days later the numbers came in. they were demonstrated to be one of the top five turn arounds in high-tech since 1990s about 5 billion. again, every once in a while, certain dynamics go wrong and a call got made. we are a very resilient family. lots of crazy things have happened in the galvin's life. we said the bullet doesn't go back in the gun. we start over. that's what harrison street is all about. >> hey, chris, with rejust about out of time. we'd love to talk more with you about real estate what are you doing now with the real estate group you v. you think you might want to come in and guest host for us sometime? >> i would be happy to do that. again, chris galvin, thank you very much for joining us today. >> thank you. >> coming up, it's miller time the ceo of lennar has been bullish. we will get an update and find out how demand remains strong

and steve mill were began his career at 40. he was ceo of delphi in his cause with aig. now he is the ceo of aerospace company hawker beech craft. we will speak with him in just a bit. "squawk box" will be right back. ♪ making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies.

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the housing mode has been remaining somewhat disappointing this year. for perspective, we turn to steve miller chief officer of lennar. he joins us from the yale summit at the new york stock exchange. our guest host is mike jackson from autonation. she with us. stewart, you were busy, you weren't watching earlier, cars, 16 million is pretty good. a recession is 13 or 14 million. we were at 9 million at one point back in '108 or '109. and i would think any industry aware of what period that was, it's housing. that was once in a lifetime, was it not, how far off the bottom

are we now? >> well, houseiing took a serio bounce downward. we were probably as low as 500,000 total. normalized housing is somewhere around a million-and-a-half and right now we're trending to around a million houseing starts per year. so we still have a ways to go in terms of recovery. i know that the auto industry has bounced back to more normalized levels. >> stewart. that was, i don't know what normal was back then, given the kind of people tarp buying houses. we were trying to get homeownership up. society was trying to get it up to 70% him then we always talk about demographics and all different areas. is it different now? everybody 30-years-old, one in three are living at home or something? other people think renting is the way to go? multi-families seems to be more popular? things are different now.

what is a good number to shoot for now? >> well, of course, when we talk about ample-and-a-half homes, remember that the peak was at about 2.1, 2.2 million homes. >> oh my lord. >> that's a combination of for sale and for rent housing starts. normal is projected to be somewhere around a million-and-a-half. the question of whether or not it's different right now certainly for right this minute, it is different. the mortgage market is not enabling demand to form at normalized levels. if normalized levels should be back at a million, five, we have to wait and see. clearly, more of the millennial generation are doubling up, living at home. it's unclear as to when household formation will resume, whether this generation is going to resume at the same stage in life as it has, as generations in the past have formed households. so we're still waiting to see

how things evolve in the wake of what was a pretty treacherous downturn. >> stewart, good morning, it's mike jackson. good morning, your neighbor up the street. now, in autos, because people stopped buying cars for two, three years, pushed out the average age, we're going to have an extended recovery because of replacement needs, much more than we normally would. so there will be a long cycle. will the same thing happen in housing where you have such an extreme event the recovery, while it will be slower, it will be multi-year extended a long cycle recovery? >> yeah. that's certainly our projection. we're expect at least the next three to five years we're in a slow and steady recovery mode. i mean if you look at the charts relative to housing, we have been under producing what's needed for a growing population and for what should be formalized household formation and even if you think that this generation is living at home

longer, doubling up for the time being, at some point this is going to have to unwind and we're going to need the shelter to provide for a generation that is coming of age, that is forming its own households and needing a place to live. >> stewart, back in the, it feels like 2006 or 2007, i won't mention any names, but the guy comes on a lot, still a.ceo in the housing, you know who i'm talking about, a ceo in the housing industry said we got it licked, we can now manage through cyclical upturns an downturns. i think his business almost went out of business. is it possible in your business to completely have it licked with as cyclical as it can be? >> listen, our industry is tricky. we have our most important commodity is land. we have to buy land well in advance of the time we actually need it. of course, there are some models in the industry that have more

of a just in time approach. it's really difficult to accomplish. we will be susceptible to the cyclicality in the marketplace as an industry at least for the foreseeable future. but i think that we can do a lot to moderate the impact of that cyclicality. >> because land, lennar had some problems back then. that was a part of everybody had land. land is much more volatile than housing. it can go down 80%, can it? >> it can go down that much t. value of the land is the residual of what the ultimate use sells for, whether it's for a home or a commercial structure. so it is much more volatile. of course, when you are -- >> in a draft like that. >> when are you long and asset like land, what you have to be in order to provide for growth, and it tumbles 50, 60, 70%, you are going to be impaired. >> i mean, that's why people even talk about tesla. they have not had to manage

through. the auto business is tough. >> there is still a cycle, joe, in the auto industry, the federal reserve decided to raise rates above normal and slow the economy, it will hit housing and autos. no doubt about it. >> you have to be tested. stay wart, we'd like to talk to you again and for longer, it's so important. especially with all of our gdp and unemployment that we report all the time. it's all about housing. so we appreciate your time today. >> it's all about housing. thanks for having me. >> you are welcome. up next, steve miller from the auto industry to insurance to aircrafts a. man who has his fing oren the pulse of the manufacturing sector. he is our special guest right after this. in the next hour, merck ceo ken phraser is here. "squawk box" will be right back. .

welcome back to "squawk." steve miller has been there and done that and wrote a book about it called the turn around kid. joining us is steve miller, non-executive chairman of aig, of course our guest host mike jackson is still here at the table. good morning, steve, thank you for being here. i want to talk to you about aig. i want to talk about some of the lessons from the book. but i want to talk about a more overarching in the insurance business which is many insurance companies, including aig, i imagine. i know met life talked about it

publicly, are very worried the government is going to decide these companies are kwet systemically important and, therefore, regulate them in a way they are not now. what do you think is going to happen? >> well, first off, i think the bob frank legislation led to this requirement for certain companies to be designated as systemically important. we were expecting to be named and we have been named and we have been working very cooperatively with the fed as our principal regulator at the holding company level ever since. that's fine. the worry that we have is we have not only 50 individual state regulators, but over 100 foreign jurisdictions that have their own regulatory ideas. what we want to see is two things. one, harmony above all the regulators so it's consistent across borders and secondly, to make sure that the regulation is tailor made for insurance companies as opposed to being just a carbon copy of bank regulation. >> so, steve, in terms of a

level playing field, are you in favor of the fed designateing other insurance companies like met life to be systemically important? they, obviously, are resisting that. >> i know met life is resisting it. prue was named. they were a little reluctant about it. they're going along wit. i believe that all of the large companies, if we are going to have this regulation, we should make sure that all the important insurance entities are if there, including berkshire hathaway as well as met life and other providers of insurance. >> do you think berkshire hath a way should be named a systemic, given part of their business is insurance, obviously, they also own other businesses? >> well, you can't have it that if you have other businesses you can avoid the regulation for your insurance activity. if it's systemically important, then the regulation should by a plead. >> have you talked to warren buffet about that?

>> yeah. yes. >> yes? and? the conversation went like? >> most companies do not want to be regulated. they say, i can be trusted. why should i be regulated? but if are you going to have a regulatory regem that, is what congress passed with dodd-frank then you might as well make sure all of the big companies who could have a big impact on our economy get included. >> steve, good morning. it's mike jackson. how are you? we very much miss you in the car business, but i'm happy our industry is healthy. we don't need your particular skill set at the moment. i know your wife is deeply involved in the car business and you led delphi, what is your point -- and you have background in the aircraft business. what is your point of view of this park being changed without it not signify a material change has been machltd i know that can't happen in the aircraft industry. i shouldn't happen in the auto

industry. you must have thought about it? >> well, the point is that the device, the ignition was apparently deemed to be not sufficiently robust. it had the possibility of being able to knock the key out of it with your fee and so on. so it was beefed up a little bit. but it fundamentally performed the same function and i don't think, you know, change, the part number made any difference. there are 500 or so parts in aer ka. they get changed all the time for engineering reasons to beef up this or that or the other thing and whether or not you change the part number is an open question. if you don't have a radical change, tweaking the same part number makes sense. >> steven, i want to get your views on some of the things going on at aig, including cost cutting in the news. you are moving a number of employees over to the philipines? >> well r, the we are a global

company. so we have activities everywhere and over time in order to be most cost effective, we are finding those positions that can be most efficiently done in lower cost jurisdictions. and we are moving activities around within the united states and moving some activitys to overseas location where the cost environment is much better for what we do. >> steve from a policy perspective, if you were in washington, you look at aig doing that you say to yourself, what should we be doing to improve the situation? i assume that we just can't compete with the costs in the philipines? >> well, there are some activities where the labor markets overseas are vastly cheaper than in the united states. we're kind of making things worse in the united states, by the way, by taking all of our social objectives, health care, for example, and increasing the burden in an uncertain way on u.s. employers. but i think until that settles

down, it's going to be very tough to get the job engine in america going again. >> now, before we let you go, you got to give us a little insight. robert ben moshe, he may be stepping down soon. who is going to take his place? >> that's it. the board is taking a lot of time to think about this question. bob ben moshe, he is a trick leader. we checked the inventory of managers and guess what, there are no more bob ben moshes in inventory. we are giving a lot of thought to what the exact spefrgss should be. >> the names the journals put out or internal candidates. do you bet they're internal people or are you looking at it from an outsider? . >> i think the journal got it right as to who the two lead internal candidates are. we are thinking hard about that. we are also looking at possible

external candidates, making sure we pick the right one. our 65,000 employees deserve the same kind of high quality leadership they come to enjoy. >> steve, thank you so much. we appreciate it very, very much. >> thank you. coming up, we go from drug deals to merck's pipeline, ceo kim phraser is here to talk about consolidation, growth, much more. he will join us after the break. . illeyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening, they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide that immersive digital capability.

in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

. >> jobs, jobs, jobs. >> the prescription of profits. the recent waves of deals on big pharma. >> and this little piggy went to market. jane wells brings us a bit of bacon news, as prices continue to climb. she's at the world's pork industry in iowa. bacon or a pork chop as the final hour of "squawk box" begins right now. [ music playing ]

welcome back. pling floichltd you don't like that? animals was great, a great album. >> i know all these. >> you don't know metal. >> i know metal is a band. >> you don't know. welcome back. >> all right. not my thing. >> john mellencamp, no pink floyd. welcome back. cnbc. the adults are caught up. hold on,ly read the headlines. >> that's a good insult. >> i'm joe kernan with becky quick and andrew ross sorkin. i called you a multi-par excellance. then you said enough of me talking about me. why don't you talk about me. >> i'm here, too. >> hi, we are here, too. >> i want to say that, are you jackson, right. we are about 15 minutes away from the adp private payroll report futures right now are

down 7 after 2 on the s&p. we had a little dip yesterday in the averages. we have been doing pretty well. but nothing has been doing well as autonation stock because of their management. >> that's true. unfortunately for us. as for that adp report, economists are looking for $210,000 jobs for pay, that comes after an addition of 200,000 jobs in april. we have that at 8:15 eastern time. united health announced an increase in its dividends. it's also authorized a $100 million share buy back program. >> that stock is up by 1.4%. shares are jumping. the life insurer has agreed to be bought for $5.7 billion by daichi lie. it's up an additional 18%. >> we have another special guest

from the yale ceo summit, merck chairman ceo ken fraser joins us to talk about the past few months. so much going on, ken. we go way back, way back him i'm not going to say that a guy did that job, but i was a big booster with the viox thing as you recall. that was a case study in how to handlep how that happened. here you are running the entire company. so you know that we go way back from that, remember? >> joe, are you the source of all success in the world. >> hey, ken, look, can i talk to you about the latest immunotherapy drug for melanoma to start with? were you at asco as well and saw all the immune news that was coming out? we reported on it earlier this week and suddenly are you right if there with it with what could work for little no ma and drug

products. >> it's 50 years in the making. we are now on the verge of incredible advances, but also for head and neck cancer, merck is investigating it for 30 different tumor times. so this is an incredible break through. an illustration from my standpoint of why it's important to be focused on r & d on the long run. >> the drug we are talking about, it isn't like some of these other impugn drugs that are specific to an individual's jen ittic ma g genetic make up. is it's a t-cell or white cell that causes an immune cell to attack cancer? it gets blocked. if you get around that? what is eight white blood cell

or is it a t or b cell? do you know. >> what it is the body's own natural immune response will often attack a tumor. but this pd1kw4r50i6king the pd 1. it seems to work across different tumor types. >> and that's exciting. let's go on to something that's been controversial and that's the price of drugs, especially in reference to hepatitis c. are you working on a hepatitis c treatment as well. i mean, the prospects for cutting down how much that disease costs society, is that warrant $84,000 for a treatment with the gilead drug and will merck's be expensive? >> let me put it into right context. hepatitis c is, of course, a devastating disease. and what we are doing now is we are now having new therapies which shorten the period of treatment and increase the cure rate. if we don't do that over the

next eight years or so joe wlerks have a massive amount of people with serserocerrosis of liver. it's beneficial to our health care system. >> ken, have you ever thought of trying to domicile merck somewhere else through a merger because it would help you so much spend more money on research and development because it wouldn't be spent on what some people are taxes that are too high? >> well, we are very proud to be a u.s.-based company and what we are trying to do in interacting with people in washington and elsewhere is to try to level the playing field so u.s.-based companies are no longer at a competitive disadvantage with european and japanese companies. >> were your eyebrows raised watching what fiedzer tried pfi tried to do. were you surprised astra xeneca would rebuff that offer?

in the u.k. there was pressure. i would think the u.k. would welcome pfizer with open arms? >> i think over the long term, the intrinsic value creation in the pharmaceutical business comes down to r & d. it comes down to innovation. i think our strategy at merck is the right one because we are focused at creating long-term intrinsic value. for society and patients by coming forward with medicines like our anti-pd-1 drug for cancer, our new hepatitis c drug, also for shareholders, by innovateing, we can have sustainable long-term cash flow, which is what creates value t. company has been in business since 1981. we have been very much focused on r & d as a way to create that sustainable intrinsic value. >> ken, lets me ask you a question relating to r & d, vam yavent is in the news trying to buy allergan. valiant, it's only 3% i believe

of the business. when you look at that, by the way the ceo of that company would suggest that rr & d for big pharmaceutical companies has not been effective and efficient. that's actually the model should be to buy up the small guys to use the marketing arm and vehicle but spending the money on r & d doesn't work. what do you say to that? >> first of all, i thought the piece you put in yesterday's new york times reenforced the importance to society long term of research and development. i think if you look over a long period of time, can you see that there are periods of time when r & d hasn't been productive. it's for the secret we have to find ways of being much more productive in r & d. if you look past that post-recent period, r & d has returned capital far in excess of its cost of capital. so there has been a return over the long period on r & d. our responsibility as a management team is to do r & d in a way that provides sustainable positive returns to shareholders and importantly provides medicines that are

important to society and patients, like our pd-1 drug. >> we are still, is it overstating to say that u.s. companies are kind of subsidizing the research for the entire world because of the way that prices are cast in europe and other areas? >> there is no question that drugs do cost more in the united states than they do in price-controlled environments. we should look at the fact you see, for example, european companies putting tear r & d headquarters in the united states. so the total value of this industry is all the great jobs that we create. the taxes we pay in the united states, it's good for the u.s. economy to have a strong, ro bust pharmaceutical sectors, i would arc you, it's a sector in the silicon valley one of the strongest sectors in the u.s. economy. we want to keep it that way. >> you made some recent. everybody seems, it's like a dance where different companies are trading assets, one gets rid

of oncology, another gets rid of a consumer business. are you where you want to be now? are there more things that you might do and what will merck be? what are you trying to make it within five years? will it be cancer? will it be, i don't know, neurological diseases? where are you headed? >> oh, so, to your last point, we're incredibly excited by advances in human genetics, advances in immu -- immunenolog. >> that is one of the major spaces in society. we want to focus on those areas where medical need and 69 tick opportunity overlap. the seam of the consumer business was based on our notion, we said all along, that it didn't have global scale. we are a pharmaceutical company. we are exited to break through research. we want to do it in a productive way. >> and harkening back to andrew's piece, i mean, it does

help when a truck company makes a lot of money, doesn't it? it doesn't hurt, our animal health seems to be less risky research and it can be generate a lot of cash. i mean, it's hard to separate theal truistic part of developing drugs with you need enough money to do it, too. >> reporter: i agree with that. again, it goes back to my point. >> that our goal is to create long-term intrinsic value. it's not just altruism. if we can create that long-term intrinsic value for society and patients coming up with important new medicines for alzheimer's, cancer, hiv, hepatitis c. >> that, inturn, maximizes the long-term cash flow for shareholders. i see it as a virtuous cycle. >> okay. we got a run up. we still got a 3% yeechltd you feel good paying out that much of merck's earnings in the dividend, ken? >> we recognize for mo of our shareholders the dividend is an important element of

withholding. so we want to continue with that. >> doming ba. come in studio. are you in new jersey sometimes i know. so we'd like to have you here if you will do it. >> it's always a pleasure. >> all right. thank you. >> bye-bye. >> thanks, ken. when we come back, adp numbers. we'll be back in a moment. (vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours.

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12k3w4r welcome back, everybody, take a look at the dow futures down about nine points, s&p futures off by two points. yesterday the equities marks, that came after three up days for the s&p and the dow. it is time for the payrolls. >> thanks, becky. adp is saying private payrolls in the month of may rising below the estimate of 210,000. they revised downwardly, at 215, moving away from the report which was 288 overall. goods producing up 29,000. services 150. that's lighter than it had been, there is the non-farm paymils. it's not included in the adp estimate. who better to ask than mark

zanby, he puts together this report for adp. mark. good morning. >> good morning. >> a couple things i like the construction number, manufacturing up ten, trade and transport up 35. overall, water your assess:here? >> well, taken at face values, steven, i'd say it's disappointing. it suggests that job growth, monthly job growth is probably south of 200,000 per month. that's about where we have been the past three years. so i would requester that to be disappointing. you know the monthly data goes up and down, my sense is underlying job growth is north of 200k. that will been evident over the course of several months. nonetheless, this particular number in isolation is disappointing. >> where were the areas that were simply disappointing to you? >> well, the key weakness was in professional business services.

that's a malange of a bunch of stuff. i don't have the precise data. my suspicion is the ten supplies businesses, they have been adding a lot to payrolls. my sense is that they paused in the month of may and that's where the key weakness is. there was also in companies of between 500 and 919 employees, that would also be kent with the idea that temp supply companies didn't hire successfully during the month. other than that, the job growth is relatively sable. >> small business if line 82,000. they have been doing pretty much that clip for a while now. one of the big stories of the recovery or lackluster recovery has been the lack of small business hiring. what does it tell you at that level? >> that's the good news. i think small businesses are kicking in. i think they're very tied to the

housing/real estate cycle. as we get more construction activity, we are steadily getting more that, lifts small business employment and growth. i've also noticed that lending to small businesses has picked up quite dramatically since the beginning of the year and that would be suggestive of a real pickup in activity there, too. so i think that's the key bright spot in the job market. at least over the last two months. >> two pieces of incongrewous data, do you think they held up while the economy was shrinking. all the talk is that housing is not doing well? >> yeah, well, i'm suspicious of the 1% gdp. i think that ultimately when all the revisions are in you know, of course, we are going to revise this data years from now. i suspect that we got much stronger growth than in this period than we think we got and it will show up in the gdp.

>> that will impact that incongruity that you mentioned. with regard to construction, i think it's catch-up. if you go back a year ago, a year-and-a-half ago, the incongruity is we got all the construction jobs, housing kicking into gear. yeah, so it feels like this is catch-up to me. maybe because the labor markets are a little tight. a lot of people in the construction trades left when the market collapsed and it's hard for builders to find the right kind of people. so it's taking them a bit of time to goer up the machinery to hiring people in the building. >> that is reflected in the stronger construction numbers. having said that, if we don't have more housing starts, if they don't pick up again soon, we will not see these job growth numbers going forward. hopefully, that i will kick in. >> our guest host is mike jackson. meek, we always turn to you to get a feel with construct, the sales of peck-up trucks are a

good indicator of that. what have you seen? >> there is no question there are bright spots, including housing. we see the pickup sales. we have good recovery in autos. energy is a bright spot. i think the big story on this recovery, whether it's 180,000, 200,000 jobs, if you are averaging 200,000 jobs a month. that's simply not enough. forget this unemployment rate. if you look at the participation rate, have you the baby boom generation retiring, generation y is not moving into the work force. and there is a lot of pain out there in america with this low employment level and we feed a much higher rate of growth to generate jobs at a much higher rate that everyone in america can participate in this recovery. >> andy. >> we have been stuck here. we have been stuck here for years. >> i know, another $800 billion stimulus program that doesn't

work. >> don't tell him that. >> if we had tax reform, regulatory reform, immigration reform. >> it's money. >> but i think whether it's up or down a few thousand this month, you have to look at the fact that we've now gone years in this recovery with this anemic job creation and in this recovery. >> mark. >> timothy, i agree with everything you said. i want to put more color on it and say two things. first at the current pace of job growth, while it's certainly not what anyone would like to see, it's actually double the rate of job growth necessary for a stable rate of employment neemp a normalized labor force growth. we are absorbing slack in the labor market. it's happening. not as fast as wemp would like, it is happening at 200k. at any other time, mike, at any other time that would be considered really strong job growth. i think it's important.

>> will we see you friday? >> yeah, i'm be on friday. >> one more point. >> we got to go, will you bring those shovel-ready projects from your last that you had? bring some for us on friday. we got to run. >> i'll think of a few, just for you. >> we need a shovel. still to come, a little bank news, jane wells is live at the world cork expot we will talk pig prices and a horse epidemic, diarrhea, oh, boy, this is the morning show, grab your bacon and cheese. >> we put it aside yesterday. >> indy 500. >> it's hard to write these. >> you just told me. >> i butchered the whole thing. >> keep going. >> we have indy 500, our guest host mike jackson to talk about his charity, "squawk box" returns in just a moment. check that car out. it's more than that...

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talk about taking the plunge. this wedding period of time is taking a picture in minnesota when the dock collapsed. 22 people seemed to be too much for the dock to handle, despite the plunge and wet dresses, look at how fast. >> we only started ten minutes

late. >> you know what i will say, though, at least they got this on video. this is something that may not be funny at the moment, ten years from now, 20 years from now. >> remember. whatever. >> congratulations to done and jackie anderson. coming up, we have more data to digest, trade data. then a pig virus won't stop pork producers from hitting the world pork expo. we have jane welch live from the iowa fair grounds. we have red arose. back in a moment.

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welcome back to "squawk box." we are just seconds away, normally we reserve that for like ten or 15 seconds, in this case there is like almost 40 seconds. so that -- i'm not sure. anyway, do you think water coha coming? productivity and cost and still trade. everybody is beating heart. rick santelli is standing by at the cme in chicago.

rick made fun when i said 242 would be the low. he made fun. steve leisman he makes fun of me in general. i tell you, do the daddy warbucks. you will be a god. >> i will be a star. >> hey, hey, the numbers. >> stop the train, stop the train. here we go. let's look at the trading deficit 47.2 billion the largest trade deficit going all the way back. wow, i'm having to go pretty far back 47.2. it looks like i have to go back to march of 2012 to see a bigger trade deficit. that's a little disappointing. all right, let's look at first quarter final, non-farm productivity. there isn't any, it's minus 3.2. this comes off an unrevised, unimproved last look. the final read at minus 3.2 is

the change. i tell you what, that's a bit disheartening. i tell you what happens when it doesn't find a home, unit labor costs do, 5.7 our last look of 4.2 joe talking the interim 242. all markets have highs and lows, i wouldn't disagree with you. i think a much more important area is how high they bounce back before they reverse into going into the lower territory. i still am not sure the interest rate decrease is over. the one thing i can tell you for sure, may is a very interesting month for interest rates, whether it was last year or this year, pretty much at a different animal completely. 179,000 i think speaks for itself. autos were strong in march and april. doesn't auger for the winter bounce. i think we are getting to the

foegs everything good for mother nature is overbuilt, underestimated and under-skiensd, whether mother nature is always changing or winter is breaking news, back to you. >> all right. thank you, rick, for more, i wonder if that would be shocking to go back below 242 all bets are off on this. >> keep in mind, joe, first of all, you are looking at inter-day, 244 is the key level. on the retracement, as long as we don't get a weekly close above 266. i think you have to look at potentially testing it. safety tip, joe, what do you think? if you are in the market for real estate. don't be splitting hairs if you get to 242 or 212, in the bigger picture this is a good time to get if that real estate deal. >> for more of the numbers, steve leisman joins us now. >> the revision of 44 billion,

what was it 41 in the prior quarter the prior month on trade? >> 40.4 now it's 40.442.2 and 47. your revision wasn't good. >> the revision wasn't good. the 47, be clear, it compares with 40. that's 7 become more. now what i have seen, rick, stick with me on this is more imports in march of 3.1%. april up 1.2%. so what i'm thinking. i have to check whether or not it's petroleum was a big part of the import increase. we're not seeing an increase in imports. which would be good, it might be, mike jackson, maybe we were restocking after the huge inventory draw down in the first quarter. >> i don't know the data, you bring up a big point mr. l, i think in a global economy, you can't have one segment doing

well, one segment doing average. potentially, if it's not energy, it can give you a glimpse into what's going to -- the european export we will get that export is when they get weak, they will want to sell to whoever has the deepest pockets. right. >> on the european trade, i have seen the goods trade balance increase to $65 billion from 62 in march. so that bears some watching. i think it will shift around. it may mean thatory our gdp of minus 1% in the first quarter goes even lower. it will be interesting to see what they do with the second quarter gdp number. you bring stuff in, that's a negative. then it ends up adding to inventory. we will see how that shakes out later on in the day. >> rick leisman. we will get back to our post in a minute. we talked before the special break. i want to understand it. last week, google announced this new plan to shift the way they are doing autonomous vehicles.

it almost seemed like they were going backwards instead of forward in terms of technology. what do you you know about it? >> i viewed it as a set back. they were going to go on public roads, i have been in a google car on public roads, now they said we are limit togs 25 miles an hour. >> without a steering wheel at all? >> it doesn't matter, 75 miles an hour on defined routes. so that's a much more limited less ambitious goal, in my view, from google. and if i look at what's coming from the eoms, though -- >> toyota is doing a lot? >> everyone is doing a lot. they're fadesing in different levels of autonomous and mobility. >> who is the most advanced of the manufacturers out there? >> they're all working on it. they all are bringing this capability. so i wouldn't want to calm out a leader. now, here's my point, though, the oems are going to save more lives by putting autonomous

capabilities in cars than anything google is going to do in the next five to ten years. so the real ball game is with the original equipment manufacturers, as far as stopping if somebody pulls in front of you, you are distracted the cars can do it automatically today. pacing with traffic as far as applying a gas and a brake, cars all do that today, staying in lanes, cars already do that today and they will gradually bring each new level of autonomy. >> right. >> to these vehicles. >> should auto insurance rates come down as this happens? >> it's a little bit of a contradiction at the moment. long term, there will be much fewer accidents, much fewer injuries, lives will be saved at an astounding rate. now, if you have an accident, your car has autonomous capability. most likely you will damage radar and lasers, you will have a bigger repair bill him some of the insurance companies are looking at the dilemmas this is about saving lives the auto

industry reduced the fatality rate down to one death per 100 million miles. that's still too high. autonomous cars and capability in cars will be the next big step. where you eliminate driver error. >> one of the things goggle cited about the steering wheel issue is when drivers actually tried to retake control of the vehicle, that was actually the problem point. that's where the mistakes were made. that's where they went in this other direction. >> if you read it carefully, they said people felt so confident they were out reading the paperch when it took time too take over, that were storm tracker 2000ed. so your answer for that is to get rid of the steering we'll. hello? so they said, no, that's too risky a situation. let's lower the speed to 25 miles an hour and put it on a defined course, or a very defined area. so that's a retrenchment from a more ambitious goal, in my view. >> we need another break. you are getting bad advice from

her. >> about what? >> i told steve not to shave it all off. >> yule brenner. >> kelly. >> telly savalas. >> the trade deficit with china rose by $7 billion. there was greater value at opec. rick was right, e.u. was up as well the trade deficit, so it rose to $14 trillion. >> dr. evil. >> for the, he doesn't. >> also mini-me. >> we will continue this conversation. the 26th annual world pork expo, can you take his advice or mine, steve. >> i like taking the advice -- >> jane wells is in iowa. she will talk bacon right after this.

. the show must go on despite a deadly pig virus that has killed nearly 7 million pigs in 27 states sending a the crisis through roof. we find jane wells from the iowa state fairgrounds with good looking pigs there, jane. >> reporter: yep. he's a real boar. you know, it's always something in this industry, either h1n1 but this virus that showed up in the u.s. about a year ago probably came from china is really throwing people for a loop. they're upping the numbers. they think as many as 8 million young picks have been kill. it's not a problem for humans.

they thought the virus was dyeing down, it is showing surprising strength. >> that is not stopping people, despite how highly contagious it is, from bringing their picks to the world pork expo. this is the nation's $100 big industry. every pig had to be certified. it is the worst of times or the best of times for hog farmers like trent luce who so far avoided the virus, meaning he is benefiting from low feed costs and record high pork prices. aren't you going to be more profitable tan last year? >> unquestionable. the people who have not been impacted by ped will have the best porkier they have had had in quite some time. >> reporter: i'm surprised so many people were here. >> 4,007 pigs, we had more

participants today than one year ago. >> reporter: okay. they're hoping the summer heat will kill off a lot of virus before things cool down in the late fall t. problem is the sows who get infected are not showing much immunity and passing it on to their next litter. >> are we going to have outbreaks next winter? we will have outbreaks next winter. will they be as bad as this past winter? i don't think they will be. the measures they are implementing, we should have a better year. >> reporter: all right. there is a vaccine being tested which pay shorten the length of an outbreak. this is an industry going through a lot of consolidation, despite record high prices for pork, there is still high demand, guys, beef still costs even more. back to you. >> plus it's delicious. >> plus it's bacon. jane, what is it with you and bacon, what was that last thing you did the weird stuff that was made out of bacon? you remember a month ago?

>> i'm always the bacon bull. i love bacon, he's not becoming bacon because if you could see the back side of him. he is being sold for breeding stock it looks like to me, it's eye popping when you look around the rear end here. >> she loves her pork. >> i do. >> she gets all te asignments. >> you aren't supposed to fame them. >> you pick your pigs. you picked the ugliest one. >> that's a good look pig. >> that is a good looking pig. >> he's thinking about whether that's food down there. >> i wonder how many bacon bulls is that guy? >> a lot of bacon bowls. he's not going to be bacon. he's going to make future bacon bowl. >> oh, boy. jane, thank you very much.

jane wells. >> you are welcome. >> when we come back, indy 500 winner ryan reed makes a "squawk" pit stop. we will be talking racing, indy, my guest host teamed up with the race pro and his charity race against cancer. check out our line-up tomorrow. ebay ceo john donaho, linkedin jeff weiner. andrew will be on the west coast with these interviews and much more, "squawk box" will be right back.

. >> let's get down to the new york stock exchange. jim cramer joins us now. we were complementing adb. they've gotten better. we believe what they were telling us. it was disappointing. do we need to get over 200 some day consistently? >> yeah. i don't know what to say. i keep hearing yesterday you had marty mucci on. that's small paychecks. he said the same things, things kind of tail off. you know, how the heck did they tail off again? how can it be so on again off

again? it's one of the reasons why i think interest rates continue to confound people because there is not enough to manage a system and too much regulation in the system. >> tim, we're going out. we have the indy 500 winner. those cars are small. i will go out and take a look at it. so stay tuned. before we go, i asked leisman about you guys have the stuff left on the side. have you considered how bad ass you would be with the full-on, you foe the lex luther? >> my barber, joe, has assured me that's a mistake. i have been in joe's hands for a decade. i'm not going. >> but you have thought about it? >> yes, i did. my barber who i trust with my life says it's a bad call for me, until he changes his mind, this is what you will see. >> okay. i went through the list, everybody that has done it is an

icon, kelly, yule brenner, you are right. i defer to the people that take care to have our hair, we need to defer to them, i think. >> exactly. that's a pantheon mini me. >> consider it. >> up next, thanks, jim, up next the race against cancer. auto nation teaming up with indy winner ryan hunter rey. cars, racing and charity next with the winner of the indy 500. first american since 2006. marge: you know, there's a more enjoyable way to get your fiber. try phillips fiber good gummies. they're delicious, and an excellent source of fiber to help support regularity. wife: mmmm husband: these are good! marge: the tasty side of fiber. from phillips.

drivers want to go further with their electrical vehicles. but you can't take a trip from lisbon to stockholm if you can't plan and re-charge along the way. the european commission is using cloud to make this possible. creating a single charging and billing network across 28 countries. so drivers can travel as far as they want to go and when they want to go.

boggles the mind, the possibilities. our next guest raced in the indy car record books as the first american to win the indy 500 since 2006. brine hunter-reay race fwors andretti auto sports joins us with mike jackson who looks cool in his smads shades. auto nation is one of ryan's sponsors. i was only kidding, you've raced in seven indies. this is the first one you've won. are you 30 yet? >> i'm 33. >> i asked -- i don't know why i asked, i asked whether you were married. your life, you are -- look at him, just won the indy 500.

>> he has a lovely wife. her name is becky. >> i know. i know. i was just thinking -- >> [ inaudible ]. >> thinking of the possibilities for you. how has it changed your life so far? >> it has been a complete -- a life change echanger, a career d something i've dreamt since i was a kid. grew up a fan of the sport idolizing the american legends of it and for it to examine full circle it's massive and to be a part of team auto nation is incredibly rewarding. >> where is your next race? >> next weekend saturday night texas. >> high banks of texas. >> will you go on -- over to europe as well? >> to europe. we have a select amount of races in the verizon indy car series that race in canada, we race in -- mostly in the u.s. domestic u.s., but make trips occasionally to brazil. >> formula 1? >> indy car. >> totally different than a formula -- could you race -- you saw how danica switched, i

don't -- does it make sense for her to switch to nascar because it's bigger? you can switch between different cars, can't you? >> it depends. >> this is you. >> exactly. >> indy car. >> what you specialize in. like i said indy car racing has always been my goal, always has been. it's the only series in the world that races on every discipline of racetrack which is the super speed ways, short ovals and downtown city street surface as well. >> when i look at you and that car, i can't believe you fit in it. >> that's what most people say. they don't know how i fit in there. i'm one of the taller guys. you kind of lay down in it. doing 240 miles an hour in that is the greatest feeling in the world. >> man. >> 240. mine -- >> i'm not going to admit it but i've gone 140, 145, you know, in indiana actually at night and you cannot believe it's a fence, the white lines are like that, 240, this far away from another car, we have no conception of

that, do we? >> no. that's the greatest thing about the finish of the indy 500, the second closest in history was at the end i was going wheel to wheel with helio cast stro nieves at 230 miles per hour. it's an amazing show. my heart was coming out of my chest the last couple laps. >> ryan and i share a passion for fast cars and fort lauderdale and most importantly a desire to beat cancer and everyone -- this is where ryan and i really connected and i said to ryan, if it's about raising funds, find a cure for cancer we can work together. that has to be what it's all about. i have to tell you, what ryan has done with us, help us raise a couple million dollars over the past year and going to do far more with that, is the foundation of our relationship. and he's a phenomenal gentleman to work with. and ryan, i have to tell you,

you're a legend now winning the indy 500. >> that's like buying a stock. you were with him before this happened. >> exactly. >> wow. >> in honor of that, in addition of what we're doing, we would like to make an additional donation of racing for cancer $500,000. $5,000 a lap for winning the indy 500. >> we've done so much with auto nation, that's huge. i think we're going to be well over our goal of $2 million this year. so that's phenomenal. >> the way i think about it, ryan winning the indy 500 will help us all find a cure for cancer sooner because he is a legend now. >> any way we can do it. >> a happily married legend. >> i understand that. i wasn't -- i was just wondering, you know. anyway, because you don't look 30. you look like you could be 25 years old. if i were going that quick -- >> you guys have a great makeup department here. >> well, yeah. as you can see. >> how do you train to go that fast? >> in these cars the toughest

thing, there's no power steering and you can see tires are really big. these firestone tires create a lot of grip. and dealing with the g forces one thing most people don't really understand. >> right. >> in the corners we sustain 4gs lateral force. that's the toughest deal, you know, your head is four times the weight it is now when in the corner. >> how much time do you spend like the business of what you do, between training in the car, training at the gym, doing all those things and then you're covered in logos so dealing with all sorts of sponsors. >> yeah. it's a tough schedule, but, you know, it's a dream job to do something you love and get paid to do it, doesn't feel like work. obviously -- >> day in the life of a driver look like? >> a day in the life. >> depends on where you are but here are at cnbc in new york. after this i'm going to texas to prepare for this weekend's race. you know, there's a lot of engineering meetings that go on with the cars. very complex machines that, you

know, there's a team of 20 people that just make this run. >> that's what i mean, how much -- what did you do for your crew after you won? how much of it has to do with how they get you in and out? >> a lot has to do with it. a lot, you see them on race day doing the pit stops. we change, put 22 gallons of fuel, four tires, and about eight seconds. >> wow. >> and then we're back out. but it's all the prep that goes on before the race. >> and your mec knicks and a lot of times the driver is important but a lot of times it can be luck, it can be bad luck, there's so many things that go into winning. >> as in sports in general you need things to go your way any time you have a good day. it takes a huge team at andretti auto sports to make this. >> ryan has won the series championship in 2012, meaning he won multiple races in multiple formats all across the series. >> yeah. >> he's a series champion and indy 500 -- >> would you do it for free? >> would i do it for free? >> just to drive. >> one way or another i would be

driving a race car. indy car racing is incredibly dangerous so there is compensation in there i guess. >> thanks for what you do and joining us, mike. >> love you guys. >> the work for cancer too. we appreciate it. that does it for us today. time for "squawk on the street." ♪ >> good wednesday morning. happy 30th birthday to springsteen's "born in the usa." welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures a little bit soft here as adp comes in below expectations for may. back below 200,000 at 179. that's the second lowest reading in about 12 months. watch bonds, the ten year is up, the yield up to 2.57 as productivity comes in at the lowest rate in six years. the unit and labor costs up 6%. europe remains a big story, of course, ahead of the ecb tomorrow. our ro m