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NEWSROOM for June 20, 2001

Aired June 20, 2001 - 04:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Seen in classrooms the word over, this is CNN NEWSROOM.

TOM HAYNES, CO-HOST: Welcome to your midweek NEWSROOM.

Can you believe it's midweek already?

RUDI BAKHTIAR, CO-HOST: Already.

HAYNES: Man. I'm Tom Haynes.

BAKHTIAR: And I'm Rudi Bakhtiar. We've got lots of business to talk about today so let's get started.

HAYNES: Topping "Today's News," Ford and Firestone appear on Capitol Hill. We'll tell you all about the first day of congressional hearings.

BAKHTIAR: Up next, Kraft goes public. Find out how the cookie crumbled in "Business Desk."

HAYNES: Then, head for the shade in "Worldview" because we're letting the sun shine in.

BAKHTIAR: We finish up with two tales from Texas. We'll visit a bicultural community and "Chronicle" a century-old celebration.

HAYNES: On Capitol Hill, a House subcommittee opens a hearing on problems surrounding the Ford Explorer and Firestone tires. Lawmakers hope the hearing will shed light on conflicting claims made by both companies. It will also examine Ford's latest move to replace 13 million Firestone tires. The Wilderness AT has been at the center of a yearlong debate over the safety of Firestone tires. Ford Explorers with Firestone tires have been linked to 203 traffic deaths and more than 700 injuries. Many of the accidents involved rollovers. Last year, Firestone recalled about six-and-a-half million tires. The company says the tires remaining on the road are safe.

Tim O'Brien gives us an overview of Tuesday's congressional hearings on Ford's recent tire recall.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): The CEO of Ford, Jacques Nasser, and the CEO of Bridgestone/Firestone, John Lampe, both came prepared to duke it out, only to have their thunder stolen by the chairman of the House Commerce Committee.

Representative Billy Tauzin said he had information that Ford may be replacing Firestone Wilderness tires with tires that have an even higher failure rate, that he's asked the National Highway Traffic Safety Administration to investigate and report back in 30 days -- all news to Nasser.

JACQUES NASSER, CHAIRMAN & CEO, FORD: Mr. Chairman, we shouldn't be waiting 30 days. If that data is accurate, we should be acting in 30 minutes.

O'BRIEN: Nasser sat patiently as lawmakers argued among themselves whether to make the explosive report, prepared by congressional staffers, public.

REP. BART STUPAK (D), MICHIGAN: I think we're misleading the American public if we say we're replacing them with worse tires, but yet, we're not getting the data.

REP. BILLY TAUZIN (R-LA), CHAIRMAN, ENERGY AND COMMERCE COMMITTEE: I don't want us to be a party to releasing bad information to the American public.

O'BRIEN: Because the information is preliminary and may not be reliable, members agreed only to share it with each other and NHTSA, not the public -- at least for now.

Firestone's Lampe insisted Ford's latest recall was totally unnecessary: The tires are safe. Ford's Nasser disagreed. That data on a million Explorers -- half with Goodyear tires, half with Firestones -- revealed the Firestone tires to be grossly inferior.

NASSER: There were 1,183 tread separations on the Firestone tires. There were two on the Goodyear tires.

JOHN LAMPE, CEO, BRIDGESTONE/FIRESTONE: Ford took new Goodyear tires and compared them with old Firestone tires, some of which were 9 years old.

O'BRIEN: Lampe said when compared with tires of the same age, Firestones were as good or better than the competition.

(on camera): And so it went with lawmakers wondering, occasionally out loud, which witness to believe, if either.

Meanwhile, officials of the National Highway Traffic Safety Administration said after studying the problem for about a year, their final report will be due out about this time next month. And notwithstanding Firestone's efforts to shift attention, some say the blame, the focus of this investigation is not the Ford Explorer, it's the Firestone tire.

Tim O'Brien, CNN Financial News, Capitol Hill.

(END VIDEOTAPE)

HAYNES: Ford and Firestone executives were not the only ones exchanging blame at Tuesday's congressional hearing, lawmakers faulted federal regulators for not getting to the bottom of the corporate war. And one senior Republican expressed deep concern about Ford's recent tire recall.

Patty Davis explains why some lawmakers say replacing Firestone tires could do more harm than good.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): The allegations are enough to drive a Ford Explorer owner crazy. Congressional investigators now say the tires Ford recently told Explorer owners to use to replace Firestone may have problems of their own.

REP. BILLY TAUZIN (R-LA), ENERGY & COMMERCE CHAIRMAN: Ford is going to replace these recalled tires with tires that have a worse claims history that some of the tires that are coming off of the Explorers.

DAVIS: Billy Tauzin who chairs the committee investigating tire safety has refused to name the specific tires, saying he wants to give federal investigators 30 days to check safety concerns. Ford's CEO said this is the first he'd heard of it.

JACQUES NASSER, CEO, FORD MOTOR COMPANY: Mr. Chairman, we should not be waiting 30 days. If that data is accurate, we should be acting in 30 minutes.

DAVIS: In fact, a congressional source tells CNN the committee tire investigation is bare bones and questions the findings. In its latest effort to replace 13 million Firestones, Ford's using tires made by Goodyear, Continental, General, Michelin, BF Goodrich and Uniroyal. Consumer advocates say Explorer owners have a right to know the facts now.

CLARENCE DITLOW, CENTER FOR AUTO SAFETY: It's clearly confusing the consumer, because we went through one recall and replaced the tires, and now they are saying that the tires that were replaced maybe worse.

DAVIS: Experts say consumers worried about tread separation should watch for these signs.

STEVE ROBAIR, MANAGER, D&D TIRES: For a ride that's not as smooth, if you are getting some trouble in your ride, you're getting a vibration, you're getting a shaking, you know, those are things to be concerned about. Get them checked out.

DAVIS (on camera): But tires may not be the only concern of Explorer owner. Federal safety regulators are considering a request by Firestone and Chairman Tauzin to investigate whether the Ford Explorer itself is safe.

Patty Davis, CNN, Washington.

(END VIDEOTAPE)

BAKHTIAR: In our "Business Desk" today, we look at a company cooking up a new product and more. Kraft Foods, which owns Nabisco, is the largest branded food and beverage company in the U.S. It employs about 117,000 people. Their parent company, Philip Morris, recently raised $8.6 billion spinning off the food company through an IPO.

Now, an IPO, or initial public offering, is a company's first sale of stock to the public. It was the year's most anticipated initial public offering and the second biggest in the U.S.

Allan Dodds Frank has more on the company and a new cookie.

(BEGIN VIDEOTAPE)

ALLAN DODDS FRANK, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): A new chocolate cream filled Oreo from Nabisco is making a lot of noise for Kraft Foods. The new cookie, said to be the first permanent addition in a decade to the 89-year-old Oreo line, has landed on store shelves.

JOHN CATSIMATIDIS, CHAIRMAN AND CEO, GRISTEDE'S FOODS: Well, Nabisco spent so much money on advertising that our customers come in and say where's the new Nabisco cookies? So we have to put it on the shelves.

FRANK: Oreo's sales now approach $600 million a year and in the supermarket wars, extending a popular brand means more shelf space at the expense of rivals.

ROMITHA MALLY, GOLDMAN SACHS: Innovation is one of the primary drivers here and, you know, it may seem marginal, but it has a huge impact on volume.

FRANK (on camera): When Philip Morris bought Nabisco, it had two goals: Create the nation's leading food company by combining Nabisco with the marketing muscle of Kraft, then spinning it off as a pure food stock without the taint of tobacco.

DAVID MENLOW, PRESIDENT, IPOFINANCIAL.COM: This offering would have taken a backseat to some of the high-flying, high-tech offerings. And now that that is an ancient part of the IPO market's history, this is the security side that people will be looking towards.

FRANK (voice-over): Food that entertains children, such as the squeezable green ketchup from Heinz, is the latest trend and Nabisco is following chocolate cream with the milk changer Oreo. Dip enough and your milk changes color.

CATSIMATIDIS: The advantage of being a supermarket owner or buyer, we get to taste it first.

FRANK: Allan Dodds Frank, CNN Financial News, New York. (END VIDEOTAPE)

BAKHTIAR: In "Worldview" today, fire and ice. We'll check out the sun, a star that's a vital source of energy. And we'll head to Iceland, located on the second largest island of Europe. It sounds chilly, but did you know volcanoes lie beneath its ice fields?

HAYNES: Lying just below the Arctic Circle is an island nation with a frigid name: Iceland. The country lies between the North Atlantic and Arctic Oceans about 200 miles or 320 kilometers east of Greenland. Its nickname: The Land of Fire and Ice because while it's home to numerous glaciers, there are also about 200 volcanoes, many still active. In fact, Iceland is not as cold as most other places located so far north. Still, only about one-fourth of the island is habitable. Most people live along its coast.

Jane Dutton takes us inside Iceland to marvel at its majesty and frolic in its frozen playgrounds.

(BEGIN VIDEOTAPE)

JANE DUTTON, CNN CORRESPONDENT (voice-over): Icelanders often comment that their homeland was unfairly named since it's strikingly green for much of the year. But take a trip the southeast of the country at any time of the year and it's impossible to think of anything else.

(on camera): I can't quite believe this is happening. I'm doing something I've wanted to do ever since I can remember. And it's such a tease looking out of the window as we go down the entire length of the island, because the small plane is taking us so close to this dramatic scenery, and I know at the end of it is a place that I've always wanted to go to.

(voice-over): The Vatnajokull Glacier dominates this corner of the country, covering more than 10 percent of Iceland's entire land surface.

Looking down on these wide and wild expanses of ice, which run from the mountains down to the sea, you simply run out of superlatives to describe just how raw and beautiful the landscape really is.

At any time of year, Iceland's unpolluted Arctic light is almost improbably clear. But at the Jokulsarlon Lagoon, where Vatnajokull meets the sea, the affect it has is almost supernatural.

(on camera): In Iceland, you're likely to experience four seasons in one hour. Just five minutes ago it was sunny and warm. But what you probably can't pick up watching this is how the misty weather has changed the atmosphere. It's really rather eerie going past some of these icebergs, some of them 2,000 years old; some of them the size of apartment blocks, tinged with blue, and the only sounds you can hear are dripping water and the cracking ice. It feels like it's another planet.

(voice-over): The ever-changing climate in this volatile, almost inhospitable terrain is a poignant reminder that the glacier's haunting beauty can turn terrifyingly harsh and potentially deadly. But to go up onto the glacier itself intensifies your experience of Vatnajokull even further. And the dramatic icescape of plunging crevasses and towering peaks provide a unique backdrop to a wealth of high-adrenaline activities.

(on camera): I thought this was supposed to be fun. OK, I don't want to play anymore!

(voice-over): In a place as vast as Vatnajokull, however, it's easy to escape the crowds and find the path less traveled by for a moment of quiet contemplation.

(on camera): Being here makes me feel incredibly small and insignificant, knowing that I'm sitting on this tiny patch which is part of the biggest glacier in Europe; bigger than all the other glaciers in Europe put together; bigger, even, than the entire island of Corsica. And knowing that, at least a thousand feet beneath me, several volcanoes are bubbling away makes me feel at the mercy of nature.

A couple of years ago, in fact, a volcano erupted here, breaking ice and sending floods of water into the ocean -- more water than in the entire Amazon Basin.

(END VIDEOTAPE)

HAYNES: Got your shades handy? We're going to take a look at the sun next. It's that star which the Earth and other planets in our solar system revolve around. The sun consists of an enormous amount of energy. Its surface is so hot that no solid or liquid can exist there, just gaseous atoms and molecules. On Earth, we rely on the sun's light and heat to sustain life. We also bank on the fact that the sun will rise and set every day and every night.

Jeanne Moos gives us her view of the sun.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Name your favorite sunset.

UNIDENTIFIED MALE: New Mexico was absolutely the greatest.

UNIDENTIFIED MALE: Over Cape Cod Bay.

UNIDENTIFIED FEMALE: Out of my window in Brooklyn.

UNIDENTIFIED FEMALE: In my car commuting from work.

UNIDENTIFIED MALE: On top of the Andes.

MOOS: But if you really want to worship the sun, check out the latest photos taken from a satellite called TRACE.

UNIDENTIFIED FEMALE: That's actually kind of scary. MIKE SHARA, AMERICAN MUSEUM OF NATURAL HISTORY: What we're now seeing is these little tongues of flame, incredibly hot regions, a million degrees poking their fingers out.

MOOS: It sure looks a lot more comfortable from 93 million miles away, though, once seen, the new images tend to make you see sunset in a whole new light; in this case, ultraviolet light.

The photos were taken through a telescope aboard the satellite. The orange color was added. But don't expect the new images to prompt your local weather forecaster to update those little sun symbols.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sunshine mixed with clouds.

(END VIDEO CLIP)

MOOS: You get sunshine mixed with science here at the American Museum of Natural History, where even an astrophysicist knows how to appreciate a sunset.

SHARA: I'm just enjoying the aesthetics like anyone else.

MOOS: For instance, the aesthetics of a sunset that lasts for several hours when seen from an airplane.

UNIDENTIFIED MALE: You just -- you kept on flying with the sunset.

UNIDENTIFIED FEMALE: Absolutely fantastic if you're walking west on 57th Street.

MOOS: Sunsets looking west from Manhattan towards New Jersey are extra special, made more vivid by pollution.

SHARA: It's unfortunately true: the more junk there is in the atmosphere, the more scattering there is of sunlight.

MOOS: Someday you may get really lucky.

UNIDENTIFIED MALE: We're hoping to see this green flash you see when the air is really pure, but we just didn't see it.

MOOS: Neither have we. It happens only rarely when the sun dips below the horizon and the Earth's atmosphere acts as a lens, bending the light.

SHARA: The sun appears flattened into a greenish bar, a bright greenish bar along the horizon, and it's very, very distinct. You can't miss it if you've seen it.

MOOS: Compared to other stars, the sun is just an unremarkable star of intermediate mass. So what happens when it dies some 4 1/2 billion years from now?

SHARA: Oh, I think we'll be looking for another home planet. We'll be on the move.

MOOS (on camera): Really?

SHARA: Mass migration. Well, there's no alternative.

MOOS (voice-over): So enjoy those sunsets now. If nothing else, the new images should make you cover your eyes and reach for the sunscreen. This star was ready for its closeup.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

HAYNES: CNN, in conjunction with "Time" magazine, takes you to the U.S.-Mexican border -- "The New Frontier." Today, we'll show you how the economic boom is changing the landscape of two sister cities. People on both sides of the border are seeing and sharing new opportunities.

Harris Whitbeck reports.

(BEGIN VIDEOTAPE)

HARRIS WHITBECK, CNN CORRESPONDENT (voice-over): A Sunday afternoon football game on the banks of the Rio Grande, an all- American scene that is played out in Piedras Negras, Mexico. Across the river in Eagle Pass, Texas, the local Wal-Mart is bustling -- store clerks and customers speaking Spanish.

The two communities are separated only by a river: the Rio Grande. Like all the sister towns that dock both sides of the border, Eagle Pass and Piedras Negras share a culture, a language, traditions, and, increasingly, a future.

URBANO SANTOS, MAYOR OF PIEDRAS NEGAS, MEXICO: We have a river that divide us, but we don't think that way. We think that the river unite us.

WHITBECK: Every morning, Luciano Valdez (ph) leaves his home on the Mexican side to take his daughter to school, then across the bridge to his job at an auto parts dealership in Texas.

LUCIANO VALDEZ (through translator): I feel as if I were not even crossing a border. For me, it's just getting to work.

WHITBECK: Back and forth between the two countries: routine.

Luciano, who holds U.S. citizenship, chooses to work in Eagle Pass because he can better support his family that way. But Luciano is one of the rare lucky ones.

Few jobs are left in Eagle Pass due to the new economic realities brought about by the North American Free Trade Agreement -- NAFTA.

(on camera): The balance of power along the border has shifted. While only 10 years ago, towns like Eagle Pass and Laredo, Texas were the sources of jobs and money, the situation today is much different.

(voice-over): The last sewing plant in Eagle Pass is closing this month, a victim to cheaper labor markets in Asia.

JOSE ARANDA, MAYOR OF EAGLE PASS, TEXAS: Any manufacturing that existed on the border prior to NAFTA has basically died. It's just not profitable to run it on that side of the border.

WHITBECK: Nor was it on the Mexican side. But businesses operating there were quick to see new opportunities.

FRANK CAMPNEY, OPERATIONS DIR., LANCEMEX: If you listen to a lot of the Mexicans speak now...

WHITBECK: Frank Campney knows. He's lived in the region since 1996.

He used to run a traditional assembly plant in Piedras Negras, but replaced it with a high-tech facility.

CAMPNEY: We are part of that new cutting edge here in Mexico. Traditionally what a maquiladora was, was hand labor. We're actually more of a full-fledged manufacturing operation.

WHITBECK: Mexico, he says, has taken the lead in positioning itself to attract new high-tech operations.

CAMPNEY: In the past, everybody just assumed that those professional jobs had to be performed in the U.S. because that's where the skills were. And I think what's happened is that Mexico, through their efforts of the last 10 or 15 years, have educated a young, aggressive work force that are able to compete on a worldwide basis for those jobs.

WHITBECK: Piedras Negras is now busy building new housing for the thousands of people who come from Central Mexico attracted to the new opportunities. And Eagle Pass is playing catchup, scrambling to reinvent itself.

JOSE ARANDA, MAYOR OF EAGLE PASS: What NAFTA is supposed to do is make it a seamless border. And wherever you have an area where labor is cheaper, the manufacturer in the industry is going to go in that direction.

But that opens up other opportunities for the border communities.

WHITBECK: Eagle Pass is rapidly transforming itself to take advantage of the boom taking place across the river. New hotels and shopping centers are mushrooming: a new service-based industry, feeding off of the growing economy on the other side. It is a pattern that is being repeated in the communities all along the U.S. side of the border.

CAMPNEY: They can be the jumping off point. And I think that's really, on the border, what most of the cities are trying to focus on. WHITBECK: With children from one country going to school in another, business people working in the two countries, and traffic increasing at congested crossing points, both sides realize the current economic shift is as dynamic as the border itself.

Harris Whitbeck, CNN, on the U.S./Mexico border.

(END VIDEOTAPE)

HAYNES: Tomorrow, we continue our series on the border, as we look at one Mexican town thirsty for water, of all things. We'll explain.

BAKHTIAR: Yes, and while we're in the region, we want to shift gears and talk about the oldest known celebration marking the end of slavery. Juneteenth originated in Galveston, Texas, on June 19, 1865 with word of the Emancipation Proclamation signed by President Abraham Lincoln to free African-American slaves in the Confederate states during the Civil War.

HAYNES: Well today, Juneteenth commemorates African-American freedom and emphasizes education and achievement.

Ed Lavandera looks at the history of Juneteenth and some of the local celebrations going on in the state of Texas.

(BEGIN VIDEOTAPE)

JANE MCLAUGHLIN (ph): I want to read you a story and it tells about the story of Juneteenth.

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Jane McLaughlin is telling a 136-year-old story, the legend of what happened on June 19, 1865.

MCLAUGHLIN: That's when the Texas slaves learned they had been freed. Nobody really knows why it took so long to get the news down here. Freedom was a long time coming, but it was mighty sweet when it got here.

LAVANDERA: Countless stories have been told about why it took more than two years for Texas slaves to find out Abraham Lincoln had signed the Emancipation Proclamation in January of 1863, freeing slaves across the Union.

One story says the messenger was murdered on his way down to Texas. Others say slave owners refused to break the news so they could get one more season of work out of their slaves.

ROBERT HAYNES, DALLAS AFRICAN-AMERICAN MUSEUM: Now, these are all folk tales, and nothing can be verified, but we do know that Gordon Granger arrived on the 19th of June, 1865.

LAVANDERA: So when Gordon Granger's ship pulled into the port of Galveston, he read the news that triggered a cultural earthquake across Texas. HAYNES: "The people of Texas are informed that in accordance with the proclamation from the executive of the United States, all slaves are free."

LAVANDERA: The original military order is stored under lock and key at the Dallas Historical Society -- seven lines that changed thousands of lives.

REV. RICHIE RUSH: That's one of the basic reasons that makes this race, this culture so strong, is that the endurance of not knowing what tomorrow is going to bring, but always knowing there will be a tomorrow.

UNIDENTIFIED FEMALE: We're celebrating the fact that our ancestors had the nerve to start celebrating that day, because they did.

LAVANDERA: 136 years later, African-Americans still celebrate the day. Juneteenth is a Texas state holiday.

LULA BRIGGS GALLOWAY, PRES., NATIONAL ASSOCIATION OF JUNETEENTH LINEAGE: It always surprises me that we were the last to find out, but I am glad we did!

LAVANDERA: These kids may not be old enough to fully understand the story of the Juneteenth jamboree, but the lesson for June 19th can be captured in one simple, yet powerful word: freedom.

Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

BAKHTIAR: And that does it for us here on NEWSROOM.

HAYNES: Yes, we'll see you back here tomorrow. Take care.

BAKHTIAR: Bye.

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