thanks to the great walter isaacson >> thank you >> we got to go. >> make sure you join us tomorrow >> melissa you are great. >> my pleasure "squawk on the street" is next ♪ good monday morning, welcome to "squawk on the street," i am carl quintanilla jim cramer is back to the post 9 and david faber is here. >> u.s. and canada reached that agreement on trade and flannery is out on ge 10-yr is below 308 we'll begin with the ge shake

up again electr general electric is removing flannery >> stocks sending higher, canada and the u.s. reached a deal. tha they'll join mexico to revamp. elon musk agreeing to pay a $20 million fine and give up his chairman seat for at least three years. let's get straight to john flannery, out of ge and now is larry cope thomas horton is the lead director the company announced will take a $20 billion non-cash charge for the power business david, you have been all over this all morning long and talks

among other things of the huge cultural shift to bring someone from outside >> as chairman and ceo interestingly as well, mr. culp taking that job, he has been on the board not too long and eventually selling down these stakes and baker used the ge company it will be interesting to see. he does not have an office yet he's getting there and sitting down and trying to figure things out. the board is frustrated by the decision making by mr. flannery, you can see a positive response this morning we'll see how things open. i have been hearing and i know jim told something a bit different. i have been hearing they'll stick on the plan. c culp signed off on it. it is the speed they want to get

this done that's an issue and they're going to move quickly. majority of that was from the acquisition. we got to keep an eye on the dividends because that got to have some issues >> it had issues with the spin off because they're going to give it to healthcare, splet so split some there >> culp is telling big accounts right now, he was remarkable it was always thought that he was looking over the shoulder of flannery's and the decision is super. i know that they have the man on the board. >> trying to reach mr. garden and he has not responded >> i think john flannery, he was given a bad hand

the hand was far worse than people realize, whether it is frankly, other than aerospace. >> well, i guess healthcare was okay >> he was involved in the acquisition even though that was under mo >> i think he was tainted because he did check off on that that was one of the sub-optimal decisions. >> one of the discussions was whether this turbin issue was the tipping point. >> there is a lot of tipping point. you sta-- don't forget we got te two news breaks on the blades. >> carl, i don't know. i have not heard it was specific to that as much as it continues

to under performance under the unit and a lot of it due to goodwill, another final poor deal that was done under the regime of mr. ml it adds up when you do it over and over >> are you surprise that -- i think it is going to look like a low price. >> the minute when culp joined, i looked at his age, he's only 55 you want to see why ge stock is up this morning, take a look at the 10-yr stock. he has not been running the company for two or three or four years. >> many people stay as long as 14 years and 25 years for this man. >> the ge's ceo, jack welsh was in the job for 20 years.

and now mr. flannery, one year there is danaher by the way. that's not bad performance >> what explains that performance at dhr >> he made it into a healthcare company. he made it much more like some of this going up almost everyday and baxter, he made it into a company that was non-cyclicle. >> i think he's uniquely suited and trying to figure out what to do with the healthcare business. >> they already announced the

plan back on june 6th to separate it out. they did not give us a lot of details and specific details they did say they'll aggressively drive forward in aviation power and renewable energy without healthcare. >> you are not going to say they're going to keep it >> right >> i don't know, i think they won't be giving away this guy is really outside he's really outside of ge. i mean that's why i think it is really up. >> what about the dividend and if you want to go through the math, listen they take $23 billion in impairment charge. you got to think of the agency is not responding on that. if you get downgraded, you are under pressure doing something for the defendanividend. how is that going to ip pampact stock that we see 15% right now. >> we know that october25th,

they offered guidance, that's going to be terrible we know the turbin business requires a number of people to be fired will culp allow us to call turbine? >> internally. >> i don't know why i say turbi turbine. >> i have to tell you that i feel bad for flannery. what the hell did they expect him to do, like wave a magic wand i mean what the hell there there is an expectation that he'll move with all speed and people tell me he's an ideal shopper. he would not move quickly on things june 26th is when they announced the separation of healthcare and

a lot of people thought it should have been done months earlier. when you are in the predicament that ge is, -- moving quickly >> there is no time. >> their oil is going up a lot the oil service stocks have been terrible there again, i say flannery, don't judge him harshly. this man was a thoughtful man and this speed of which he should have dealt with things was not what they wanted but can we just admit that he had no idea nor anyone else of the depth of the problem >> i think that's a fair point >> remember when he came in it was, we didn't get the right down and that was the big moment >> from the long-term care obligations. >> he didn't knew about those.

you only knew about those if you had someone. my father had it he paid nothing for it it was the great boom for the elderly. at least of all, ge, which kept the residual >> that's the part >> that's the residual they could not figure out a way to completely get rid of all of it when they did the larger deal more than a decade ago >> i know, it was not flannery's fault. >> landon was right. i thought that was -- >> for me as people combining the stock at 13 bucks, do you of a prospect of dividend cut is this the time you want to buy it >> two is not coming out with a positive no, does it >> it has the best return of any

cyclical >> there is 100 million shares short. >> october and november, we see a lot of leadership changes. i want to hear and i know this sounds like it is unpunting. i want to hear what was said >> it has been a remarkabl remarkable -- it had sources deep within ge a deep cold column even. they're people who tell things that will nevaer >> we'll be watching for his note there is a deep throat within ge >> the zu.s. and canada reaching that last deal the u.s./mexico or canada

agreement. top white house adviser, pete navarro talked about the deal this morning on "squawk. >> the big deal that are in place when the mexico deal was signed there was a disagreement over dairy. there was a disagreement over this thing called chapter 19 which is a dispute resolution mechanism that the canadians really favor basically, at the end of the day, we got much more access to dairy and canada is going to have their chapter 19. >> the president tweets this morning. he says deficiency and mies and mistakes in nafta, greatly opens markets to our farmer and manufacturers, reduces trade barriers to the u.s. and will bring all three great nations together in the competition with the rest of the world.

they're all agreeing with china is the one that needs to change its behavior >> it is interesting about this is the wage component. $16 an hour. suddenly you should invest in there. near the place i have in mexico, there is a huge number of factory and giant number of japanese and german cars being made, why? because it is $5 an hour and no healthca healthca healthcare because it is paid for by the state you will have unions who wants to move there and who wants to make cars there nobody >> is it a price pressure for automakers >> absolutely. >> another reason he does - not that you need any reason to hate them and scooters are doing well and there is uber and people don't buy cars anymore when they're 25 in queens i think it is very amazing that

this is an amazing deal. it worked. it really worked you raised wag wages and you dot build factory in this place. when you see peter navarro comes out and he's positive. >> he was kind of in a good mood >> he was in a good mood and smiling. i was waiting for hill to joke around with football and stuff >> still need congress to ratify that's an open question for house. >> really s >> did you watch "saturday night live." >> apparently nobody watches it anymore but except us. i watched the 13 minutes and it was brilliant. >> but nobody watches. >> nobody watches that >> shares of tesla are way up as elon musk does settle with the

sec, we'll give you what he's giving up. the premarket, dow is coming off the biggest weekly drop for two months best quarter since 13. back in a moment i'm ken jacobus, i'm the owner of good start packaging. we distribute environmentally-friendly packaging for restaurants. and we've grown substantially. so i switched to the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. that's right, $36,000. which i used to offer health insurance to my employees. my unlimited 2% cash back is more than just a perk, it's our healthcare. can i say it?

what's in your wallet?

. shares of tesla is surging in the premarket this morning as

musk strike that deal. separately tesla will also pay $20 million to settle claims that he fails to police his tweets >> musk is urging staffers to ignore the distraction and a adding that the company is very close to turn a profit david, you worked on this as well over the weekend. >> yes, i was able to get a hold of them prior coming out of it he did not lose much by not taking the deal the first time he got one more year added and 10 million bucks added to the overall fine $40 million now. did you guys see this? >> he also will have additional controls and procedures placed on his communications. >> so smart. >> i do think it is interesting. i did not get a chance to question people about how often

or whether they remember this where the sec is taking governance in its own hand you need a new chairman and a new director this is something that's embraced by tesla's shareholders the sec is almost stepping in. >> a good friend of mine had the same thing happened, where the sec called them and listen you have to run the company. this is what has to happened had this been announce by the company, i think the stock would have gone up >> we want independent director of the company, we don't want him tweeting i think all key executives should have their tweets vetted no matter how high up. >> the chapter where they are not is closing quickly now with ron baron coming on tomorrow, is that is the all clear? >> oh, he's going to say a thousand dollars remember zero verses a thousand.

i wonder about the commander in chief. >> yes, that's interesting >> you just dismissed it >> i said yeah, it would be interesting. >> even though this batter is passed, it is worth reading the complaints because it is pretty good >> yes, it is good, is it? >> they did have strong case >> because he gave it to him he had not done any real work that would be typical. >> i said friday, ucoyou you contradicted me. >> it was a thing. >> maybe it was. >> how great was this? >> it was a well documented -- >> why did they give up? >> why were they willing to settle though? > >> that made no sense to me after he rejected it >> the 20 million and the 20 million. >> good deal for him

>> they're willing to do that. of course mr. musk as you may have expected after many of us discussed this subject on friday saying why would you not take that deal given you will be in hell he finally from what i understand, all right, gunpoint i got to do that. >> why would the girlfriend be i am brepressed by that? >> does that make any sense? he must have told the sec i was trying to impress my girlfriend. >> who would know that other than he would. >> they obviously talked to him. >> or talking to the girlfriend. the complaint was moments in time where he had let's say he made a series of ill-advised decisions one after another. >> following the tweet

>> the most expensive tweets in history. >> the stock was 379 or 380 right after the tweet? >> you got the best point. ron baron will be on tomorrow. he'll raise the price, maybe 2,000? >> we'll get jim cramer's "mad dash" in a moment. take a look at the market as we get q 4 underway don't go anywhere. fast, reliable internet is crucial. does it every go down? yes. can't do my job. business grinds to a halt. our gig-speed network not only downloads files up to 20 times faster, we go beyond fast with 4g backup for complete reliability. so if the unexpected happens... (snaps fingers) you stay up and running. we lost power... but not to that. i want that. (laughing) get fast, reliable internet and add tv and voice

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fourth you are the kincluding ts u.s./canada deal we'll get the opening bell in just five minutes and watching tesla.

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all right, we got two and a half minutes before we get started with trading here for the nyc for the week let's get our "mad dash," you want to talk about chipotle. >> it is time to go from whole to sale. >> stocks have got opiniten up o much at the same time, chipotle is starting their reward program. 15 points per dollar, free entrees. i question this downgrade. i don't think it is the time to downgrade. i know the stock is rich i di it think it deserves to beh >> target is $400. they argued since the new ceo

came in, 10%, upgrades >> taco bell, he's been extraordinary. >> i think the prime nickel is really, maybe the best in the business i understand it maybe and it goes to -- what are you going to do bhab it go maybe it goes down to 20 points and you go back in yeah, it is too cute the downgrade is too cute. i think that that it brought the luster back. it is every bit as good and a lot of good things on the menu more delicious than ever he's done a great job. >> what? >> cramer, more delicious than ever >> didn't you tweet this weekend as well? >> i heard from the ceo rather after. >> promises that's going to clean up and we'll go back next saturday we are using it and we love lowe's, we need our lowe's in

between. >> i didn't know you saw that. >> let's get to the hoping bell, first one of the quarter at the big board, garret mosen, honeywell transportation business and celebrating hologic, focusing on women's health >> they're up huge 84.25 last week to 87.375 last week the bonds are roaring. >> wow >> the bonds i got it the bonds are important. looking at some things here. >> i am sorry. get them on the phone. i think it is interesting to garret taking to cell to start people don't like garret because

of auto. honeywellloses auto, that's going to make it more attractive people are worried of the electric cars and the kind of turbo charging that's out of sync jesus, sales how about give it a chance all we are saying is give garret a chance >> apparently they did not want him. >> as for ge, it is going to take you back to the 19th and the middle of september basically after the terrible run that it had over the last two weeks. >> we want no more surprises the power right down was s so -- everyone knew the power right down allison field, one of the worst deals. flannery had fingerprints on it. >> he did. ge is marked by deals where they

pay too much for assets and took too much on results, when they're paying cash for those offsets. when you pay more and sell for less on both sides is happening way too often during a long history of mr. memo, you send to suffer >> and culp. >> he's getting the ge multiple higher >> the rail brothers i remember them. i got to goldman sachs and we heard them the rail brothers were the pride and remember they were selling tool divisions when tools should be sold. culp is one of the legendary figures that i felt that he was too young to get on that board and not breathing down the neck of john flannery >> 55.

>> young man >> yes >> we saw his agent and i didn't realize that back in the spring, it was not loss on people but there is that possibility. >> and david salaman, first day on the job, right? >> tomorrow's ingenuity. >> ian reid he, he's fired >> yes >> and jack lou. i see it >> what block was he from? >> in queens >> i don't know. >> 164 >> did you notice like in brooklyn or the bronx, in queens, oh, he's from 142nd. >> you are asking confusing things >> 76th street and road and avenue i don't know where i grew up, which one? >> speaking of management change, papa john's testifying

today in the first of two lawsuits he filed against the pizza chain. >> our kate rogers is joining us live >> reporter: he's set to begin to testify any moment now. the founder and former ceo is seeking for documents related to his ouster >> he's feeling good this morning and here what else he had to say to us >> what's your message to shareholders >> same message we had for 34 years. >> reporter: what's your end goal here? did you want return to the company in a ceo position? >> i definitely want to be apart of the company and i am apart of the company. >> reporter: mr. schnatter commented on cnbc's

advertisement campaign he had used a racial slur on a conference call back in may. he maintained he was not using that in its effect but he was quoting the word this is just one of two suits he's filed against the company the second suit he's suing the new ceo steve richie as well as the board of director claiming they're causing irreplaceable harm to the company. john schnatter is the only witness testifying today we'll get more updates >> thank you it never stops >> fourth quarter starting the way q 3 ended. that's futures up. intel, you got the deutsche lamb research >> hardware bad and software is

good fang is coming back a little bit. i am shocked by the by the way of tl canadian companies that do autos, i am watching the parts for autos. >> i don't understand how the pod stock keeps ongoing higher october 17th, is the date of repeal i don't know if there is any fine print of the new canadian yield about cannabis >> that'll be interesting. >> right >> i have not seen anything on that >> right >> the justice department is very against it. i know that there is a ground swell and series of approvals by the fda of derivatives i think it is worth staying close to it. the banks in mexico, you can consolidate and what it means for the city and has a huge presence in mexico

you are not allowed to coordinate with the city and the united states if you are trying to bank with mexico. >> i have not mentioned campbell this morning and it is worth mentioning this morning because the stock is up. we got an over view as it competes to replace the entire board of directors at campbell and send the company to a different direction as currently is the case. remember we talked about the math here. difficult if most or if not all of the families, shares are being voted against you to actually win, it would be 75% or more of the votes cast to go in your way dan lobe is one tough guy who takes on a fight with relish we are reading through the

presentation this morning. >> some of world wholliest reference here there is a picture >> that looks -- it is kind of cool it is not going to plaget it onh camera can you get it close on that >> there it is he's got a spilled can of soup there. >> it is also -- its got a little bit of others >> it does look like whyte >> losing market share and execution issues and lever raj of five times and no permanent of ceo and failed to hold the ceo accountable. those are some of the reasons they are citing here we don't have a record date or a meeting date yet we'll have a lot more as things

get more heated as they will no doubt here what's the end game if there is not really a buyer and you know i have talked to a lot of people around this who indicates, was there really an offer at that time is the real interest unclear and so they wonder even if you win, can you create the kind of value that's worth the effort that you put in >> it is worth more than 36 bucks. that's a pathetic price. if you run the isle, the snacks are there and v-8 is there and they are in many isles it is natural to presume that somebody wants to be in that isle >> when you shop at the super market, when your wife tells you to go pick up some stuff

>> yes, when she does do that. >> when was the last time you shopped? >> you know how much a gallon costs? >> four bucks. >> putting it on the broccoli or the skinners ups upgrade over at bemo >> proxy for our trade >> people are not expecting this deal to happen over the weekend, it is such a win for ksu tlas traini there is a training that goes hfgoes goes -- three times a day. that's who who transports the autos. that stock is worth much more than 1 and 15 here everyone was really worried. >> constellation brands is down this week. it should be a winner with

mexico, take it off the table. a lot of people feel that beer sales are low and there is a downgrade. beer sales are problematic you know what's really incredible >> what's the company that's most impacted by china, selling one and four of its pieces of what it makes to china >> boeing. >> and the stock is kept at an all time high. >> maybe there is something afoot in terms of china, is that something? >> they got the approval and people are excited of the antitrust approval coming in from china >> well, nextil. >> it is supposed to be any day >> i am just saying right here and right now and stocks are going up 10% >> we talked about this thatlast

week >> what is the tension between the two countries? >> i think the chinese pmi this weekend, we export the numbers really weak. >> i will roll the dice. >> maybe they do want to roll the dice i am just trying to place how boeing can hit an all time high of china of all the stocks >> um, our parent company pausing its stock buy back stock is down, comcast says its common stocks repurchase will pause in order to celebrate the depthness. it does expect to repurchase this year. seems to be anticipated by investors. >> yeah. >> you got believe it before you deliver, before you keep on buying back stocks it would have been as negative

if he continues to buy back stocks >> disney stock has been on a roll >> it really has >> people like the fact that i had 15 million coming in and they'll be able to vote more to the directive consumer efforts that they are making and more to the developing all the content that they need to, espn. >> espn plus >> 10 bucks a week basically >> you can sneak watching things with espn plus, the wife doues not know you are out there and you are saying wow, i really like it >> there was a fear where they would put themselves in a debilitating position in terms of their balance sheet so i think that fear abated onc they lost. >> could you see acorn, jim?

did you remember this deal they lost. they're going to appeal acorn. that's a disaster. a lot of investors out there look at that >> it has not opened yet by the way. >> have you been watching of hasbro matel is not up. really, really strong situation. >> now on the board of cbs >> nfl ratings continue to impress of what we are seeing and judging from the four windows over the weekend, 12% year on year >> it is so much more exciting to have teams that you have not looked at doing well some teams that have been

terrific are not doing well it is exci-- it is exciting to se see -- we never saw the jaguars last year. >> there were a lot of passing >> you seem to adjusted well >> hi wife thought i handle the loss well yesterday and then she went upstairs. >> you are still super bowl champions. >> i threw nothing at the tv or kick the dog >> no. well, that's a bad call. >> just think about that if you are new york fans. >> you have a lot of rings >> dow is up 206 canada is the best day of a couple of months >> let's get to rick santelli. >> good morning. >> a i look up, look at one week of 10s

very buoyant and after the failure of reaching and close above of the highfield of 311 and going right up to it before the fed's announcement dollar virtually unchanged and rates are unchanged. we can say a lot about the administration but there are a lot of uncertainty that was aimed at nafta and canada and getting the agreement in front of congress but it looks like a lot of positives coming out of this and even though overseas and marks are noticing the process is not over. you can see where i am talking about, we are hovering of the best levels of the year. if we look at what's going on in the currency market, we can see all the aspect of the agreement that was voiced over the weekend affecting the markets. whether it is going on with the currency of choice which is the

canadian dollar. the dollar verses canada you can see the canadian dollar is impress sive of some of the best levels since may. it has not got to its key levels yet. and finally the dollar index, if this is the damage of the dollar index, still holding roughly 95 and a good chunks of the game from late last week. we are still up roughly right around 2% for the year for the dollar index back to carl, jim, david >> rick, thank you very much when we come back. flannery is now out at again electric after 13 months ones the job. we'll check with bob wright later on speaking of ge, for once, ge is at the top of that list. we'll be back in a moment. making my dreams a reality

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tesla up almost 17% takes you back just to thursday levels, almost erasing friday's losses ron baron will be on ""squawk box" tomorrow. haven't gotten his take on the drama that surrounded the company and onel musk. we'll get stop trading in a minute dow is up 217. oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies lead with digital.

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. >> let's get to cramer in stop trading. >> there's a note from sweat suisse saying that the 2019 content slate for from netflix is stronger. i can't emphasize how important that is. they said 2018 wasn't that strong because this thing trades on signups and if you have shows that you talk around the water cooler about netflix, the stock goes higher so i think this is an important call. netflix has been stalled but if the content is good for 2019, you'll get a lot of signups. >> i think we all know we talk about different series. >> who's left to sign up >> who's left? there's millions of people on the planet. >> i want to make sure. >> if you have a phone line, if you have a cell phone you can

watch netflix. >> all around the world. that's the point. >> i'm watching "the fall" which was out for a while getting nightmares about it. i always see what's new on netflix, new on netflix. so i think this is very interesting. there hasn't been in 2018. >> these levels are almost the highest since july. >> so i think you have to watch that because that's been the fang that -- obviously the "f" of a fang is the kiss of death but nice to see the "n" go up. >> a piece the journal about the dollar how much will weigh on guidance? >> we had pepsico and that's very much a dollar story and i think that we're going see, it won't take long to find out how much people are going to talk about it the -- you know the italians -- some of the euro had strength, even though italy is weaker. i think we way overdo the worries about italy.

way overdo it. >> friday was a big day italy wise and the canadian dollar having a nice day. >> let's remember that italy is protected by the eu and always has been and you're worried about their ten year it's the same as our ten year. give me a break. >> you saw their budget, though. >> well, a suboptimal budget >> do you worry that's going to happen here, too bond market is going to go, what another trillion dollars i don't know >> i want to be neutral on that. >> maybe not today or tomorrow but soon. >> maybe. >> but your kids -- >> maybe tonight on "mad." what's on? >> i'm going to talk about an ipo and see whether it's worth it and talk about amazon survivors. what companies actually have beaten amazon? the death star, so to speak. discovery has still not stopped. >> no, discovery, man. >> look at that thing, you did that, david.

>> i had nothing to do it with >> no, i do not. >> it was communicopia. >> that seemed to satisfy investors. >> watch cbs and viacom. those stocks are doing quite well. >> not today vierks co, viacom . >> really? >> nice to have you back. >> great to be back. >> see you tonight, "mad money," 6:00 p.m former ge vice chairman bob wright is with us on the shakeup at the top dow is up 212. i know that every single time that i suit up,

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welcome the "squawk on the street." we're at post 9 of the new york stock exchange dow is up 20 u.s. canada trade, tesla and musk settle and flannery out at ge. >> our road map will start there. john flannery ousted at just 13 months on the job.

>> stock is spiking for tesla this morning. nafta is dead. long live nafta. the u.s., mexico and canada agreeing to a revamped and renamed trade pact the president will speak in just an hour and we have stocks rallying in part on that deal. >> let's go to rick santelli good morning, rick. >> good morning, carl. before i treat you to ism, i'll give you construction spending for the month of august. we're expecting up four-tenths we end up one-tenth so a little light but we gain a tenth on the revision of last look which moved from up one-tenth to up two-tenths now for the money ball number, our september read on ism manufacturing, expecting the number around 60 but we ended up with 59.8.

that one-tenth, well, that would have pushed us to 1983 the point of the matter is anything near or above 60 is uniquely strong as this number is and let's go through the internals with employment coming out this week. the employment index moved up just a smidge from 58.5 to 58.8 and prices paid moved down markedly from 72.1 to 66.9 leaving new orders, also a drop from 65.1 to 61.8. so the internals are weak, carl, all yours. >> rick santelli, thank you very much shares of ge surging current ceo john flannery is out after just 13 months on the job. in his place, larry culp while flannery was ceo on your screen, cut in half the last 13

months, expand that out to include immelt who was ceo from '01 to '17 stock down 70% in that time. and last week look at the stock under welch going back to '81 to '01. those are the glory days when the stock skyrocketed in value fascinating chart work there joining thus morning on the cnbc newsline is former ge vice chairman bob wright, currently a senior adviser at lee equity partners good to have you. >> good morning. this is a stunning day for me. >> some have argued this is not a surprise given the way flannery was perceived in house. >> couple comments flannery and larry culp and tom horton are all about the same age. unusual. and i guess they came on the board only five months ago and

that had to be at the request of flannery or at least certainly maybe even recruited them so -- their thought process -- they announced their thought process is more or less what ge is doing right now and i want to be positive on this because it's a very -- this could be very disastrous larry culp looks like a very competent individual and so does tom horton they all have very strong backgrounds. i see larry in particular is almost a serial acquirer and disposal guy, built his company up from very modest background to very significant with a lot of technology, a lot of science and so forth and that's all possible i also notice he's a senior adviser at bain capital among a

lot of other significant situations and tom horton has a strong background with at&t and american airlines. he managed the acquisition of u.s. airways with american airlines and larry has been in 30 -- they listed danaher, about 30 acquisitions he did between 2000 and 2014 so from a positive standpoint those look very attractive they've kind of said, well, we're going to move ahead with the program as written and that's probably accurate but we'll find that out. but there's an issue here, ge

people, the people that are left, a lot of people have left but the people that are there are some of the very best people in the world in engineering, science, and math. and this -- this is a jolt to them now that they've had enough issues and i hope that larry, because he did so many acquisitions, he must be very tuned to how to deal with a culture and keep the best people that will be a big issue because this company despite his performance is very large, huge number of employees and location locations. they talk about maybe flannery wasn't moving fast enough. we'll have to learn what that means. i don't know how much fast er.

>> given the charge of power, bob, are concerns about the dividend justified >> well, look, they have -- that's been up in the air for some time. it's all built into the stock price. if you want to call it a stock price. it's all built in. there's a concern about that and they didn't address it or -- at this early stage i think we just have to wait and see. >> bob, don't go anywhere. stay with us let's bring in yale school of management senior associate dean and cnbc contributor jeff sonnenfeld you've had some interactions with flannery the past few days, right? >> i was supposed to be having lunch with him in an hour. it's been called off, though i was very enthusiastic about john flannery. bob knows him better than i do i knew him when he was a last-minute substitute at a big event we were doing in india for jeff immelt and of course we

were disappointed because of all the indian titans and what i saw him do before my very eyes on a cold call, he closed a multibillion dollar deal with one of india's largest companies and he had just basically parachuted in there. this is before he moved into health care. and i thought he was a very smart guy. i think something that perhaps bob could speak to it has to do with atmospherics here is flannery is -- he might come off as sluggish, almost academic seeming and that his -- he's not the most sort of charismatic back-slapping sort i think there's more of a dynamism, personal dynamism to culp and horton, they're fabulous guys but john is a good, honest person. and i think his plan analytically is close to what's here i would not jump overboard as some people on this network did giving nelson peltz any credit

nelson peltz bought into ge when the stock price was four times what it is right now and endorsed that strategy of jeff immelt every move he made nelson supported publicly and i think what's happening here is the bord itself has come to some conclusion there was some pressure from analysts but not activists to make this move happen and i think it's shame you look at danaher -- >> whoa, jeff, jeff. why is it a shame? why it is a shame. >> well, the fact they felt they needed to make a move. danaher is a company that grew out of a reit in the '80s that reinvented itself. they're very dynamic and under culp they reinvented themselves into health care and the exact

business s we're talking about divesting. and if we were on one half of the analysts saying we didn't move fast enough to divest health care announced in june or july and we still have it now, there's a good chance culp will keep it. we'll wind up celebrating the guy who didn't sell what could be a real gem. >> jeff, a couple things i know you have this thing going back and forth with trian. it's been a terrible investment. we were saying they were not behind this from what i understand it was to the extent members of the board who were frustrated with the pace of decision mak g making. >> i think they budget that the 30s. >> their average price is somewhere in the low to mid-20s. which, by the way, is still horrible but i just didn't want to -- >> they got it up to 30. that was the big gain. >> listen, it's been straight

down for a long time the dividend -- and bob, the dividend is likely to be suspended is a fair point. there's many people who believe given the impairment charge of $23 billion that the rating agencies are going to have a hard time maintaining their current ratings and therefore you have to see a response from the company. bob, i guess a question to you, if the dividend is suspended in some fashion or dramatically reduced, do you think that's going to hurt or is it already being accounted for? >> i think it's in the stock i think it's in the stock. don't forget, this $23 billion is good will, not cash >> right right. although it points to the deal being yet another in a long line of deals in which this -- the previous management team overpaid for assets they bought and of course got underpaid for assets they sold. >> without question. at the same time when they were buying stock back at $20 to $35

and not paying off any debt and not paying down any pensions or anything. >> just wondering. jeff has come out in defense and in support of flannery and he did make a number of moves in a relatively short period of time to try to turn around the company. do you think this was a ge problem or a flannery problem? >> i can't answer these questions. they use these terms "he wasn't moving fast enough." i don't know what that means i agree with jeff. if you were to put the three people together, look at their backgrounds and look at what they are you would say they're like that three musketeers and you would take any one of them what about the -- flannery has never appeared to be a guy who people don't like.

it has to be something we don't know about here that was in that board room that took this action again, i think they picked two really good people to be heading up the company but flannery was a good person himself so there we go. >> so jeff it gets at the question of whether ge is salvageable and what sort of steps need to be taken now i get that clearly the market wants to see an outsider maybe the problem is he was a long-time insider and they have a credible outsider. now what needs to happen >> aviation -- sorry, bob, go ahead. >> go ahead, jeff. >> well, they've already announced what they're going to do and it's a complex situation. i agree health care may look much better now than when the slowness, they just keep having negative reports on power. that's what's killing it.

>> i agree with bob. it's been perceptions and communications after every earnings address we saw this already-crushed stock taking bigger hits and you had to feel sorry for flannery that the message wasn't the problem, it was the messenger somehow wasn't lighting torches of excitement now i will say that culp and horton are also pretty loe go guys i think they speak very well but they've stepped away from their positions far earlier than they needed to. they're both in their mid-50s but culp took over as ceo when he was 37 years old or so. tom horton when he did the deal with u.s. air yield it had power to dug parker who was a fantastic airline ceo. but these guys are not trench warfare power-grasping sorts bob said we have to look at the positive the positive is we have another team coming on board that the

market seems to appreciate their communications skills but strategically i don't think there's anything wrong with the path they were on. other than the fact that they're moving too fast. i bet they'll reconsider on health care. >> no, they're not going reconsider on health care, jeff. culp and horton were part of that decision. they were on the board when that was made i'll come back to my reporting which is numerous people it was paralysis by powerpoint, not enough decisions being made in realtime when they needed to be made. every decision being shopped too often and too long why would you stay opposite? stock was 11 bucks it was. >> it was clearly not communicating well to the market

and what was the clear vision of who the new ge is going to be. but i do think that it's a huge disappointment to investors and you can't deny that. how long do you let somebody twist on the vine. 13 months is a short window. i would have give an year and a half what difference would six months have made? i think it might have made some difference, especially if he divested health care to a place like danaher that would have bought it. danaher, they didn't have a nick until this space until culp took them in there and they moved into in a very big way and it defines so much of the company. >> they just announced they'll get rid of one of their biggest businesses so they're very -- they're almost like activists themselves and bob you used to chafe at it

when people used you guys as being ge being the exception to prove the rule that these diversified industrial conglomerates don't work and we said there's ge. >> it was the old itt stigma >> that's good history we appreciate you guys helping us understand the present day. bob, jeff, we'll talk to you soon, appreciate it. >> thank you coming up, other big news of the day, u.s., canada and mexico agreeing to revamp a renamed nafta trade pact plus elon musk settles fraud charges with the s.e.c we'll talk to a former s.e.c. official about whether he got a good deal. "squawk on the street" will be w u23rit ck w u23rit ck doisp 0. an old friend. a new beginning. some welcome relief...

or a cause for celebration. ♪ what's inside? ♪ [laughter] possibilities. what we deliver by delivering.

a there's a new nafta trade pact with a new name ylan mui joins with us the details. >> we have a deal, david it did come down to the 11th hour but canada, mexico and the u.s. have a deal to remain in a string free trade agreement. on twitter this morning president trump called it an historic transaction that solves deficiencies and mistakes in nafta, opens markets to farmers and manufacturers and brings down trade barriers. some of the key points of this new deal, dairy access, under

the agreement canada will open 3.5% to 3.75% of its market. that's more than the 3.75% it agreed to under tpp. canada also agreed to phase out a controversial dispute settlement system with the u.s. that allowed foreign investors to sue the government. the process for challenging anti-dumping and countervailing duties like the one in canada is preserved. the administration agreed to exempt up to 2.6 million cars each from canada and mexico. the two countries would get a 60 day reprieve from similar tariffs in the future. the full text of the deal was posted around midnight the early read from the business community is positive. the business round table, chamber of commerce and national association of manufacturers had been pressing for a trilateral deal and said they welcome modernizati modernization, the afl-cio said

our history of witnessing unfair trade deals demands the highest level of scrutiny. everyone is combing through the text it's not called and a half a it's now the u.s. mexico canada agreement or usmca. >> that will take a little while to get used to does this end the tariffs on steel? >> what senior administration officials say is those tariffs are on a separate track so for now the steel and aluminum tariffs remain in place. what canada and mexico got was relief from tariffs on autos or tariffs done under the national security threat they used for the steel and aluminum trfs. >> got it. usm usmca. let's get more about what this is about

how much of a cloud of uncertainty was hanging over the market because of a lack of a nafta deal >> not so much here in america but canada clearly canada has been one of the worst performing markets for a while europe's underperformed, emerging markets have underperformed and global investors have been leaving the united states because of great returns last year and worried about the politics and tariff this is year so we think assets will come back to north america. all this does is build additional credibility for president trump and his negotiating style with respect to getting this deal done. consensus in canada thought this was not going to happen and the way he went around it, went to

mexico first and got what he wanted with respect to this nafta agreement this is good for canada and the united states if you do the work and look at analysis with respect to earnings in canada and the united states, earnings and gdp have become increasingly correlated between the two countries. as america goes, so goes canada. >> we see that in the currency market the loony is having a good day, peso is up a percent catherine, we don't have the details but based on what we've seen how do you assess what this will mean for the u.s. economy, canada, mexico and any change in supply chains and potential economic growth which is what the administration is going for along with more jobs as well. >> i'm less optimistic in fact, i've been -- what this does is it creates a managed trade in the auto industry throughout north america it's been managed before but there are additional layers

being put on to the wage rates, the voluntary export restraint element of it. there's still some question about whether or not canada and mexico will be protect ed there are limits in terms of how much they can export so you know i think there are a lot of details incorporated in at least what we've seen that are going to be -- regulatory details. these are rules of origin details and those kinds of details end up being inefficient and will add cost to the vehicles so i think it's great we got the deal done but the devil is in the details. as to how it's going to affect the auto industries. the auto sector in general in terms of the element of the s&p has been very weak and i think it's important of it -- we might see a rebound today on that.

the devil is in the details as to how effective this would be in terms of bringing jobs back to the united states as compared to raising the cost of vehicles. >> some are trying to argue this was the easy part, the hard part will be selling it to congress, especially if the midterms go a certain way. how much visk in thrisk is in t? >> some. but the devil is in the details but this is positive for overall economy part of the auto business is down, down, down we already knew that the auto stocks in canada and the united states have rallied so the clear thing is that the output is higher than what was originally said so that will be increasing volume which means more jobs and more work and, oh, by the way, if these companies are starting to make more money, more taxes so i think at the end of the day this is a good deal. now, again, the cloud and the shroud of all of this growth

heading into the midterms, i think this builds credibility for the president's case and what the republicans are doing from a longer term perspective this is good news. >> is it good news, catherine? i've heard that argument from a number of traders here is it good news and does it bode well for what the u.s. is doing with china there's already an agreement in place that needs tweak bus what can we extrapolate as that tough hardline approach is going and whether this improves the odds something gets done? >> if we look at the details in this and we will be looking closely, the degree to which these are bilateral deals, that it's managed trade, that it's regulating the production function of automobiles even down to what kind of labor is incorporated, that has

implications going forward from the competitiveness of the industry now there's the extent to which there are these side aspects with regard to currency. currency manipulation. that's a piece of the nafta or the usmca deal, the currency manipulation and that is targeted towards a number of other trading partners who do manage their currency or have been purported to and we will see that showing up in any kind of deal with the u.s. and china but we are talking about managed trade. the language that comes out of washington is free, fair and reciprocal there's nothing free or fair maybe fair but not free. >> well, they did remove the free the nafta as well. >> there's no free trade. >> there's no fta anymore. >> brian and catherine, thank

you for joining us. >> thank you coming out of general electric stock price raleilying after the company announces a surprise leadership change at the top. we'll speak to experts about a what this means for the company and its future management. plus, speaking of ousted ceos, the founder of papa john is in court and we'll be back with tt tethhaafr is

i'm sue herera, here's your cnbc news update uk prime minister theresa may is preparing to make a significant new brexit offer to the european union in an attempt to open the door to a deal earlier, the brexit minister warning the european union that the country will leave the block without a deal rather than accept a bad one dominick raab speaking to members at the conference. >> if we can't obtain a deal, if an astemt made to lock us in by the back door, if the only offer from the e.u. threatens the integrity of our union we will

be left with no choice to leaf with no deal. a woman was rescued three days after an earthquake and tsunami hit the sulawesi island in indonesia more than 800 people were killed after a magnitude 7.5 quake struck on friday spawning a tsunami as high as 20 feet the nobel prize in medicine was awarded to two researchers from the u.s. and japan for advances in discovering how the body's immune system can fight off cancer the million dollar prize will be shared by james allison of the university of texas and tasuku han joe honjo of kyoto university. sarah, back down to you. >> papa johns founder john this gnatter will appear in court in delaware to testify in a lawsuit he filed against the former company. as the battle between schnatter and his namesake pizza chain continues, we're outside the

courthouse. >> john schnatter began to testify in one of two lawsuit in the company he founded and used to run as ceo and chairman of the board. today's trial centers around documents he is seeking relating to his ouster. we have a courtroom sketch of him. he has begun his testimony by talking about the company's declining financials under its new leadership we caught up with him outside of the courtroom on his way in. he told me he was feeling good about the testimony. i asked him what he thinks about the company's new marketing campaign which features its employees and franchisees instead of john who had been its spokesman for many years i asked what he thought about the company filing for trademark and patent paperwork to remove the apostrophe in papa john's for a potential new logo here's what he had to say. what's your take on their new advertising campaign >> it's better than the last one. >> reporter: your response to them removing the apostrophe

from john's? >> i didn't know they did that. >> the last campaign was more critical of him. it pulled from social media some criticisms that came out from people who had been cust moefrs papa john's who were disappointed to find out he used a racial slur in a conference call schnatter told us he's not looking to come back as ceo. he says he's part of the company, he retains a board seat and is the largest shareholder he said his message is that he is acting in their best interest as he always has been. he is the only witness to testify today. we'll bring you updates as we get them papa johns the company says john is simply trying to distract from his own words and actions in filing this suit and another suit against their new ceo as well as the board of directors back over to you. >> kate rogers who has absolutely owned that story since the beginning, thank you very much. it's time for our etf spotlight. we'll go to seema modi who has a look at what's moving. >> session highs and trade sensitive stocks are getting a

lift on the trade deal stocks are higher in canada as well and the canadian currency is up against the dollar, trading around a four-month high global industrials are having a good day take a look at i shares global industrial ticker vxi. that includes many big railways like canadian pacific, kansas city southern. but traders awaiting any signs of a u.s. china trade deal though tensions don't seem to be simmering down at this point carl, back to you. meanwhile, david getting some reaction on this ge move today >> when they were contacted by cnbc, they had this to say

when john flannery was appointed ceo in august of 2017 he faced a company with a difficult balance sheet position and i'm grateful for his efforts in outlining a new direction for ge larry culp had a great run at d danaher, i wish him success and all the best that's all we've got from mr. welch on this unexpected and certainly very quick change given mr. flannery's tenure extended one month beyond one yea year his successor jeff immelt in the job 16 years those durations are getting shorter. >> that's for sure. >> what do you think of the stock up 11% some people are saying it's not big, others say it's a vote in confidence you look at danaher's performance over a 14-year

period they was ceo it was very, very strong i do think that we asked bob wrielgt wright if it's in the stock but it will be interesting to see if and when that occurs and as people dig through the numbers, the majority of which was related to the acquisition of allston but not entirely, how bad is it? there's no guidance any more from this company. so pretty significant move up for what is not good news on most fronts other than this view off stronger hand. >> last week down to a nine year low for the stock. >> and when we come back, tesla's ceo elon musk settling charges with the s.e.c we'll take a look at what he's giving up. dow up 2 54. almost the best day since august 'rba ia me wee ckn mont

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welcome back to "squawk on the street," i'm saraize within carl quintinilla and david fiber live from post 9 at the pink that a little over an hour into the trading session. let's get a check on where we stand. the dow is up 250 points in celebration of the usmca, u.s. mexico canada agreement, or nafta 2.0. the mexican and canadian currencies are soaring it's materials, industrials and energy in the lead david we're joined by two guests let me start with you, were you surprised given that musk had walked away from a settleme memt

air >> i was surprised but i think this is an important case for the s.e.c. so i think they were eager to have it concluded. >> they had a lot to say in terms of him misrepresenting virtually everything there was about the chance of taking this company private. so what was it the s.e.c. saw wouldn't have been a good thing. why agree to the settlement? >> so i think there are a couple of things. it was a very important message and secondly i think they wanted to minimize harm to tesla's investors by concluding it quick quickly and they feel like they accomplished the goals with the settlement they reached.

>> when we got you on the phone on "closing bell" when the news first hit that the s.e.c. was making the suit and you were fairly positive in saying this is going to be a catalyst for positive changes at tesla. is this what you had in mind >> it was an ideal situation for the company and the reason is this, not only do you remove him as chairman, which has been an obstacle for investors over the past several months but you keep him as ceo i think to be clear longer term elon musk does not need to be ceo but there's an important piece here that i wasn't sure how it was going to play out but having him remain ceo is critical because the company is at war right now in terms of getting to profitability and producing model 3s at a scalable rate a wartime ceo is different than a peacetime ceo and elon musk makes the right wartime ceo so i think this played out as good as it can and the last piece i'll add is that this is a huge

opportunity for the board to bring somebody in from the outside that can gain investor confidence i hope they capitalize on that they needed to have their hand forced and here they are with a gi gift. >> one thing that hasn't been noticed is not just the independent directors but they'll put in place additional controls and procedures to oversee musk's communications. i don't know what that means or whether it mean we won't see him tweeting as much forhe does is he going to be penalized in some way? any sense how that might play? >> sure. i think he may be tweeting as much but what they're trying to do is make sure there is oversight of substantive tweets. if he's -- there are certain things that may have to be

reported in s.e.c. filings and the company is going to be tasked with having procedures in place to approve those before they go out and if they don't they risk being in violation of their settlement with the s.e.c. so there will be a lot of xi us the for them to do that. to put some controls around him. >> he did tweet about six hours ago the video, the music video to naughty by nature and that was his only text. naughty by nature with a winking emoji so clearly that policy has not yet taken effect. >> or maybe that was approved? >> maybe it was approved in which case who knows to what degree if there is a strong number two that comes in to run day to day c.o.o., how does that work how do you operate directly under elon musk? >> the substance isn't going to change in terms of how direction is going to be, in terms of how

he's going to be maintaining talent which has been an issue none of that will change in the near term. they will start lay the ground work for the next two years as we shift from wartime to peacetime ceo to start to highlight somebody who is the obvious successor, something like what steve jobs did with tim cook so i look for that opportunity over the next several months. >> okay. thank you both. >> thank you when we come back, you're looking at a live shot of the white house. the president will make remarks on that revamped and renamed nafta trade deal at the top of the hour we'll take you to the rose garden in just about 15 minutes. dow hanging on the a 250 point gain to start the fourth quarter. "squawk on the street" is back after a short break.

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lead with digital. let's stop over to the cme group and check over with rick santelli and get the santelli exchange.rick. >> good morning. thanks, carl like to welcome my first guest of the week, andy brenner. thanks for joining me. everybody is weighing in on canada now joining mexico on a deal that still has a few votes ahead of it. your thoughts, andy? >> first of all, rick, always good to see you, buddy as far as the canada situation, i think this is a feather in the cap to the president with his bilateral trade strategy i think what it does, it puts a lot of pressure on china over the weekend we saw it continue to weaken chinese economic numbers i think the chinese are really starting to hurt here. so the president is winning the early battles of the war with china. i think that's very important. as far as canada, i think that's wonderful that we put together

nafta 2. i don't see it having a major effect on the bond market but the china story is a bigger one and it will encourage the president to pursue his current china strategy >> you know, andy, many of the complaints, rightfully so, were it was a bit messy if the goal as president in this administration was to isolate china, they could have done it more efficiently in hindsight, as messy as it was, i think the pressure on china considering both mexico and canada and to some extent europe have capitulated, raises the bar in ways that should be advantage u.s. your thought >> absolutely, rick. no question that this is coming at a bad time for china because their economy was slowing down anyway and now i think it is going to accelerate it you'll see china ease and change reserve requirements, starting to put money in, speed up

infrastructure >> do you think the chinese will slow walk any further real negotiations until after the midterm? has it gotten to be that political from the chinese perspective? your final thoughts. >> absolutely, rick. there's no question about it the chinese will slow off this until they see results of the midterms and then i think they'll continue to slow walk it at the end of the day, the president will win this one and win it big. >> andy, thank you it is going to be a very interesting 40 days coming up, that's for sure. david faber, back to you >> all right, thank you, mr. santelli coming up, a live announcement from the president, that's a few minutes away. it will be on the new trade agreement with canada and mexico that rick was just discussing. jon fortt, what are you watching for us >> i am watching this deal between the sec and elon musk. we want to check in with kara

swisher on that, and this controversial new plan in california to diversify boards leinupn quk o"saw aly.

welcome back to "squawk on the street." i am jackie deandless. general electric leading the industrials higher, material stocks are the best performers in early trade among the names leading that sector to the up side, martin mary may marietta the industrial gas giant jumping after the antitrust authority approved a proposed merger, bringing them a step closer to finalizing a deal several years on making. on pace for the best day since february, 2016 back to you. the president will be appearing in the rose garden to make a statement on the trade deal between mexico, canada and the u.s. we are looking for reaction ford has a statement saying we stand ready to be a collaborative partner to be sure

this is ratified in all three markets because it will support an integrative, globally competitive auto business in north america. interesting. seeing as how they're likely going to have to pay workers a little more, depending where the cars originate >> but that was part of the goal that the trump administration had. peter navarro, coming on "squawk box" with a victory lap, saying we're getting more access to canada's dairy market, a big sticking point we're going to take the president live as soon as we see him come out in the sero garden at the white house when we come right back it's time for sleep number's fall sale on the

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