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American Morning

White House Obtains GM CEO's Resignation, Gives GM, Chrysler Ultimatums; More Bad Weather on the Way to North Dakota; Madonna is Delayed in Malawi Adoption Quest

Aired March 30, 2009 - 07:00   ET

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


JOHN ROBERTS, CNN ANCHOR: We're just crossing the top of the hour. Thanks very much for joining us on this AMERICAN MORNING, the Most News in the Morning. It's Monday, the 30th of March.

KIRAN CHETRY, CNN ANCHOR: And good to have you with us this morning. We have a lot going on this morning.

ROBERTS: Oh, yes.

CHETRY: Including the latest breaking news from the auto industry.

ROBERTS: Absolutely. A lot of that to tell you about this morning. Here's what's on the agenda, stories that we're breaking down for you in the next 15 minutes.

We begin with the breaking news from the auto industry. General Motors's CEO is out effective immediately. The government says he has to go, and it's putting GM and Chrysler on notice, making serious changes -- or make serious changes, or forget about getting any additional bailout money.

Thousands of people protesting in London demanding jobs and justice ahead of President Obama's arrival for the G-20 Economic Summit. A much different Europe than the president remembers from the campaign trail. Last week, the EU president called the Obama administration's economic plan, quote, "A way to hell."

And right now, people in the Midwest dodging one bullet, but another one maybe on the way in the form of a spring snowstorm that could severely test levees along the Red River. People living in Fargo narrowly escaped disaster after the river began receding over the weekend.

And we lead the hour with breaking news out of Washington and Detroit. General Motors and Chrysler are awaiting tough ultimatums from the White House. Restructure fast or additional bailout money could be withheld. GM's CEO Rick Wagoner is out as part of the plan. On CBS' "Face the Nation" President Obama talked about what Detroit has to do to survive.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What we're trying to let them know is that we want to have a successful auto industry, U.S. auto industry. We think we can have a successful U.S. auto industry, but it's got to be one that's realistically designed to weather this storm and to emerge at the other end much more lean, mean and competitive than it currently is.

(END VIDEO CLIP)

ROBERTS: We have team coverage on the story this morning from Washington to Wall Street, including reaction from auto workers. Our Kate Bolduan at the White House. Christine Romans here with us in the studio in New York. And Susan Candiotti is in Warren, Michigan this morning.

Let's begin with Kate Bolduan. And reaction from the West Wing this morning, Kate. The announcement coming up in about four hours time, what are they saying about it this morning?

KATE BOLDUAN, CNN CORRESPONDENT: They are waiting for that announcement, but you said earlier, harsh words coming from the White House. Both GM and Chrysler faced a Tuesday deadline to prove their companies will be viable, but even before that, the White House flunked both carmakers. Officials saying that Chrysler will not survive alone and GM's top man is already feeling the pain.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): GM's CEO Rick Wagoner announced his resignation from the top spot of the troubled auto giant early this morning. Posting a message on GM's Web site, Wagoner stated, "On Friday I was in Washington for a meeting with administration officials. In the course of that meeting, they requested that I step aside as CEO of GM, and so I have."

The White House is now giving GM 60 days to pull off a complete overhaul on the taxpayers' dime. Administration officials won't say how much more cash GM may get. The company has already taken $13.4 billion in government loans. GM's statement also confirming the majority of GM's board will now be made up of new faces.

In front of the cameras, President Obama is reminding this new plan means everyone involved is going to feel the pain.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: and that's going to mean a set of sacrifices from all parties involved -- management, labor, shareholders, creditors, suppliers, dealers -- everybody is going to have to come to the table and say it's important for us to take serious restructuring steps now in order to preserve a brighter future down the road.

BOB SCHIEFFER, HOST, CBS'S "FACE THE NATION": But they're not there yet?

OBAMA: They're not there yet.

BOLDUAN: And while the White House has high hopes for GM, things are much more bleak for Chrysler. Detroit's number three automaker is getting just 30 days to reboot. Administration officials say the only way forward for Chrysler is a partnership with Italian carmaker Fiat.

(END VIDEOTAPE)

BOLDUAN: And if a deal is reached with Fiat, Chrysler could get $6 billion more from Washington. No dollar amount yet for GM coming out of the White House but the administration officials stress that a structured bankruptcy is still on the table for both, John.

ROBERTS: Looking forward to that announcement this morning, 11:00. Kate Bolduan for us at the White House. Kate, thanks it so much.

BOLDUAN: Of course.

CHETRY: Well, we want to show you now just how far GM has fallen since Rick Wagoner took over in 1994. The company had a hold on a third of the U.S. auto market back then. Last month, that was down about a fifth or 19 percent and overall auto sales in February were the worst since 1981.

Our Christine Romans is breaking this down for us a little further. One of the questions it's important we have to make sure that we say Ford seems to be doing OK.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's right.

CHETRY: Doesn't seem to be touched by all of this.

ROMANS: Right.

CHETRY: But what about the future of the big three as we know it.

ROMANS: Well, Ford has avoided working with the government to try to get any bailout money. Ford has been holding on OK. GM will not survive -- oh, I'm sorry, Chrysler will not survive alone and GM clearly, the White House saying it has flunked its attempt to try to be viable. So GM losing $3.5 million every hour in the fourth quarter of last year. It looks as though that's a pace that's continuing. It's lost $80 billion in four years.

I mean again and again, it's failing grades for this company. The sales are down 53 percent in February, has cut 60,000 hourly jobs since 2006 and it's still on the ropes here. So the White House obviously giving a failing grade to this company and to Chrysler.

CHETRY: All right. Christine Romans for us. We'll be following this throughout the morning. Thanks so much.

ROMANS: Sure.

ROBERTS: Thousands of GM workers have already found themselves in the same position that Rick Wagoner is in today, out of a job. But many current and former assembly line people say the problems are much bigger than just one man.

CNN's Susan Candiotti joins us this morning. She's outside a GM plant in Warren, Michigan for us.

Hi, Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Hi, John. You know, the news is rocking GM employees who are already worried about their own jobs and benefits.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): When the news broke, veteran GM worker Stan Ream was out with friends.

STAN REAM, G.M. WORKER: I can't believe that the -- that our country, our administration has the power to force a CEO out of his job.

CANDIOTTI: Ream is jittery enough as it is. He builds prototypes, cars of the future like the new electric Volt. Ream is worried about his own future now that CEO Rick Wagoner is out.

REAM: We've been profitable for years with him at the helm. We did not cause the economy. The auto market did not cause the poor economy right now.

CANDIOTTI: The fact is GM, Chrysler and Ford sales have been plummeting. Analysts project the latest figures will drop as much as 49 percent since last March. Some union activists applaud change at the top, comparing it to a new football coach for a losing team, but not if it means even more devastating job cuts.

MICHAEL FERGUSON, UAW LOCAL 160: We need customers. We need people with money in their pockets to buy products. We don't need any broke auto workers that can't buy their own products.

CANDIOTTI: Some analysts say unions are going to have to sacrifice jobs, health care and job benefits. And if the bankruptcy court has to get involved so be it.

PETER MORICI, SMITH SCHOOL OF BUSINESS: At that point, the bankruptcy judge can evaluate the situation, impose a new labor contract, force the union to take a haircut on health care benefits, force the bondholders to convert to equity and zero out the shareholders and even make changes in the management.

CANDIOTTI: Stan Ream says he's willing to sacrifice his $30-plus hourly wage within reason. GM's all he knows.

REAM: It's a great place to work. It's given me great living for 28 years. So it really doesn't owe me anything.

(END VIDEOTAPE)

CANDIOTTI: And he was getting emotional about that. You know, Ream and other employees do want to keep their jobs and they say the chance to get GM back on its feet. Will they get it? John, back to you. ROBERTS: Sixty days to find out what everybody is willing to do here. Susan Candiotti for us in Warren, Michigan. Susan, thanks so much for that this morning.

The president will speak about the auto bailout live this morning at 11:00 a.m. Eastern. You can see it here live on CNN or if you don't have access to a television set but you do have a computer, you can catch it on CNN.com/live.

CHETRY: We're taking a look at the new stories we're tracking for you this morning. Gunmen in the eastern city of Lahore, Pakistan, armed with rifles and hand grenades, attacking a police training academy. So far, at least 11 officers are dead and dozens wounded. The gunmen battled police and paramilitary troops for hours after that brazen attack.

World markets taking a tumble this morning. Hong Kong's Hang Seng closing down nearly five percent. And in Japan, the Nikkei tumbled almost as much. Traders in Europe also seemed to be following that lead. Right now, major markets are down.

Plus one year ago this week, Texas authorities raided the polygamist compound in Eldorado, Texas. Oprah Winfrey is now talking to members about the day that police took their children away. We're going to have video of that for you.

It's eight minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning. The Beatles classic about the guy who no one wants to see -- the taxman. Well, during a sit-down with CBS's "Face the Nation," the president played a little defense when talking about his tax plan.

(BEGIN VIDEO CLIP)

OBAMA: Absolutely not. Now, first of all, let's understand I've delivered that middle-class tax cut for two years in the stimulus package, so people will be getting...

SCHIEFFER: This year and next year.

OBAMA: That's right.

SCHIEFFER: Are you going to let that run out?

OBAMA: Hold on a second. They'll be seeing their tax cuts in their paychecks starting on April 1st for 95 percent of working families, just as we promised. I strongly believe that we should continue those tax cuts. We should make them permanent because the average worker out there, the average family saw their wages and incomes flat line even during boom times over the last decade.

(END VIDEO CLIP) CHETRY: And the president heads to London this week to talk about the economy at the first G-20 summit, his first, actually. It's a meeting of the world's 20 largest economies, 19 different countries as well as the European Union. Tens of thousands of anti- globalization and environmental protesters are also there. They're already in London. They're calling for jobs, for fair distribution of wealth and for curbing greenhouse gas emissions.

Chrystia Freeland, U.S. managing editor for the "Financial Times," had a chance to talk with President Obama ahead of the London summit and she joins us this morning.

Thanks for being with us.

CHRYSTIA FREELAND, U.S. MANAGING EDITOR, "FINANCIAL TIMES": A pleasure.

CHETRY: As we talked about it his first trip abroad as president, attending the G-20, and really one of his first big tests on the world stage. So what is his top priority heading into this meeting?

FREELAND: You know, the big message that the president had for us is he thought there would be a consensus at the G-20. Ahead of the meeting there's been a lot of talk about a rift particularly between the Europeans and the Americans, with the Americans pushing for a big fiscal stimulus and really pushing the whole world to participate in a fiscal stimulus so that you don't have the rest of the world effectively riding on America's coattails.

And what we have heard from some of the Europeans particularly Germany's Angela Merkel, is some comments saying, you know what? We don't need as much of a fiscal stimulus because maybe we're not in as much trouble. What the president told us is that perception of the rift is not going to be true at the actual meeting and that this actually meeting we're going to see consensus around fiscal stimulus and also consensus around the need for new regulation of global financial markets, which we already had a hint of last week with Tim Geithner, the secretary of the treasury, talking about some really sweeping new regulations for Wall Street.

CHETRY: All right. Let's hear a little bit about what the president said when you spoke with him about finding that consensus.

(BEGIN VIDEO CLIP)

VOICE OF OBAMA: There are some G-20 participants who are arguing fiercely for stimulus, others for regulation. What I have consistently argued is that this is a -- that what's needed is a "both and approach." We need stimulus and we need regulation.

(END VIDEO CLIP)

CHETRY: And to your point, and Germany as well as France, those are two big and very influential countries on the world stage who say, you know what, we can't spend any more money. We need to worry about regulation right now. How does he bring them to the table then, and convince them that yes, you do need to do your part as well to make sure that we globally find a solution?

FREELAND: Well, part of what he was saying was that the approaches of the Americans and the Europeans are less different than they might seem. But the other point that he made that I thought was quite interesting was that the crisis can hit America first. And so it was natural that the Americans, especially fiscal response would be particularly robust. And he did say that he thought as the crisis intensifies around the rest of the world, we'll just see a natural convergence based on the lived experience of the economic problems.

CHETRY: Well, it certainly hasn't been rosy. While he does have a lot of support for Barack Obama as the president, some of his policies have actually come under fire from someone. We heard the Czech Republic prime minister say that, you know, this is a road to hell, when he was speaking about the stimulus plan. But I also want to ask you about his stature on the world stage given what's happened in the U.S. An interesting op-ed titled "America the Tarnished" from Nobel Prize winning economist Paul Krugman today.

He wrote, "That leadership role to an important degree reflected America's stature as a role model. The United States, everyone thought, was the country that knew how to do finance right. How times have changed."

So how does that really affect the credibility of our president heading into the G-20?

FREELAND: I think that that is a really important point and that's one reason why this meeting is going to be a really big test of Barack Obama's leadership. He comes to that meeting, as it were, with a really poor hand of cards -- you know, hand of cards that actually says you know what? Maybe the American approach to finance isn't that fantastic.

What he did say though to us was America does have to take a leadership role and he seemed very keen and very prepared to try to assert it. I thought that there were are a lot of parallels between the kind of approach that he at least is planning to bring to Europe, and we'll see how it actually plays out with what we've seen about how he plays U.S. politics.

It was very much talking about consensus building, talking about being able to listen to both sides. So you know, it's worked pretty well here, although he didn't get the Republican buy-in to fiscal stimulus. Now I think we'll have a chance to see whether that approach works in Europe.

CHETRY: All right. Well, we'll certainly be following that. Chrystia Freeland, managing editor of the "Financial Times," thanks for being with us.

FREELAND: It's a pleasure.

ROBERTS: Missile on the launch pad, North Korea ready to hit the trigger. Find out why the U.S. says we have no plans to shoot it down right now.

And happening right now, Madonna in court this morning, trying to adopt another child from Malawi. Hear what she has to say to critics who say the child is better off in her own country.

Sixteen minutes after the hour.

Behind these walls, Oprah looks for secrets inside a polygamist sect one year after the raid. Four hundred kids taken and returned.

You're watching the Most News in the Morning.

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the Most News in the Morning. Twelve months ago, authorities raided a secretive polygamist sect in Texas. The story captivated the nation. One year later, the members of the sect are again talking, this time to the queen of daytime talk.

Our Jason Carroll is looking into that for us this morning. The question I have, what else is there to learn about these folks that we haven't learned already?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: You know, we're going to find out. You remember when the story broke, everybody was obsessed with polygamy. The raid in Eldorado, Texas came after allegations surfaced underage girls were forced into marriages by the Yearning for Zion's controversial leader, Warren Jeffs. The sect has remained very private allowing just a few cameras into their compound.

CNN was granted access last year. Now Oprah Winfrey is the latest to get inside. Winfrey spoke to members who recounted the day of that raid.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I got to my baby. He was in shock. I handed him to my oldest son Sam and said you've got to just take care of him. And I cried. But I know there's no human person that could ever describe the sound in that building. I don't think anybody can ever forget the terrible, terrible sound.

(END VIDEO CLIP)

CARROLL: Well, authorities stormed the compound on April 3rd last year, removing more than 400 children last May. The Texas Court of Appeals ruled there wasn't enough evidence to justify the raid and ordered the children's return.

Several men from the sect, including Jeffs, are still being held on sexual abuse charges relating to underage marriage. Winfrey asked the women if they were allowed to tell their husbands if they wanted to be in a monogamous marriage.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Yes.

OPRAH WINFREY, TV HOST, "THE OPRAH WINFREY SHOW": You could?

UNIDENTIFIED FEMALE: They let us talk about it. If he wanted me to be his only wife, that's probably how he'd stay.

WINFREY: And if he didn't?

UNIDENTIFIED FEMALE: If he didn't, then I'd say yes, let's -- we need some company.

(END VIDEO CLIP)

CARROLL: What Winfrey also spoke with members about investigators' claims of beds in their temple used to consummate underage marriages. The full interview is going to be seen later today on "Oprah Winfrey."

You know, in terms of legal news, Jeffs' attorney just recently wanted some of that evidence found in the raid suppressed. So we'll see if Winfrey goes into that, but I'm sure she's going to go into a lot more things including, you know, that strange dress and things like that, that some of the sect members wear. So we'll have to see what Winfrey was able to uncover.

ROBERTS: You know, the dress is sort of easily explained because they prefer simple clothes. It's the hairstyle that I'm still trying to figure out.

CARROLL: You're still trying to get your head around that hair.

ROBERTS: I guess I am (ph). Jason, thanks so much. Looking forward to that.

CARROLL: All right.

CHETRY: All right. Well, breaking news this morning. GM CEO resigns, pushed out by the White House, so why did the heads of failed banks get to keep their jobs? We're asking the tough questions this morning.

Also breaking news this morning, brand new satellite images of suspected missile launches, one in particular on North Korea's launch pad. We're learning details about the Defense Department plans should this missile head toward the United States.

It's 22 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: All right. Breaking news this morning. We're getting some brand new satellite images of a suspected missile sitting on a North Korea launch pad. Here are the photos now. And you can see -- you can see the missile casting a shadow on the ground below it scheduled for launch some time next week.

U.S. Navy ships are already ready -- at the ready to shoot it down if it comes to that. Hoping certainly it does not come to that.

CNN's Barbara Starr has the latest live from the Pentagon. And again, of course, conflicting reports. You have the North saying this is going to be a commercial satellite launch. This is purely for peaceful purposes. As we take a look at those new pictures, do we have any other indication otherwise this morning?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: No, not really, Kiran. By all accounts, the U.S. accepts North Korea's assertion that what is going to sit on top of that long-range ballistic missile will be a commercial satellite, that this will be a peaceful launch.

You have, of course, the U.S. does not shoot down commercial satellites. That backs the Obama administration into a bit of a corner, because when you look at that picture that is the same technology as an intercontinental ballistic missile that could reach the United States. That's what the U.S. does not want North Korea to have. But Defense Secretary Robert Gates making it very clear over the weekend, the U.S. is not looking for a military confrontation.

(BEGIN VIDEO CLIP)

ROBERT GATES, U.S. DEFENSE SECRETARY: I think if we had an aberrant missile, one that was headed for Hawaii, that looked like it was headed for Hawaii or something like that, we might consider it, but I don't think we have any plans to do anything like that at this point.

(END VIDEO CLIP)

STARR: So no plans to shoot it down and certainly a hope that this missile will fail within seconds of launch just as it did back in 2006 when the North Koreans tested the same type of missile. It fell harmlessly into the Sea of Japan. But, of course, the looming question out there next week when it launches, if it launches, if this missile flies a long distance, that means the North Koreans have achieved some new success in their technology and there will be a lot of questions about who's been helping them -- Kiran.

CHETRY: All right, Barbara Starr, we are going to continue to follow this, of course, throughout the morning. Thank you.

ROBERTS: It's 26 and a half minutes after the hour. And here's what's on this morning's agenda, stories that we'll be breaking down for you in the next 15 minutes here on the "Most News in the Morning."

We're just hours away now from President Obama unveiling his new auto bailout plan. He's putting General Motors on notice giving the company 60 days to restructure and also forcing its CEO out the door. President Obama says he doesn't have the luxury of tackling the nation's problems one at a time, and he told CBS that some relationships, personal relationships that he has may be taking a hit because of that.

(BEGIN VIDEO CLIP) OBAMA: I don't think I've lost any friends, but I'm sure I've strained some friendships. And look, this is an invigorating job. In some ways, I feel incredibly fortunate to be in this job at a time where the presidency really matters. You know, this is not a caretaker presidency right now. Every decision we're making counts, and my team understands that.

(END VIDEO CLIP)

ROBERTS: In the past few days alone, the president has outlined plans for the economy, border security and what to do about Afghanistan.

Madonna's adoption hearing has been postponed until Friday. She was in court this morning in the African nation of Malawi, hoping to sign the papers and take home her new 4-year-old daughter whose mother died shortly after birth. She adopted her son David in Malawi last year, but there's at least one children's aid organization saying that Madonna should rethink this one. We'll talk to the group's spokesperson and find out why coming up in just a few minutes time.

Meantime, the big news of the morning, the White House's plan for the auto bailout. A little more than three and a half hours from now, we're going to hear from the president what to do. One of the things we do know is that General Motors CEO Rick Wagoner is out. He's on the unemployment line, along with so many other people who are in the auto industry.

Christine Romans here minding our business, "Minding Your Business" and ours too. She joins us now.

So it would seem when we look at Chrysler because GM has been given 60 days to restructure...

ROMANS: Right.

ROBERTS: ... and if it does, it will get billions and billions of dollars. Chrysler has been told, get a deal with Fiat.

ROMANS: That's right.

ROBERTS: And if you don't, you get nothing. And it seems after hearing all of this talk about this particular business is too big to fail, this company is too big to fail, the White House is saying it's OK if Chrysler fails.

ROMANS: The White House seems to be saying that Chrysler can't survive alone. They've decided that Chrysler can't survive alone. Maybe GM can.

Remember, we keep talking about the future of the Big Three, but Ford hasn't had to go and ask for help from the White House. So you're right, I mean, Chrysler and GM are in two very different positions here right now. And one thing, John that some analysts have been saying for some time is that maybe there needs to be a GM-Ford merger and Chrysler is the odd man out. Chrysler either merges with somebody else overseas or goes away. We know that the big three as we know it is changing and will not be a year from now the way it has been right now.

ROBERTS: But what's the effect if Chrysler were to fail?

ROMANS: If Chrysler were to fail, I think there would be a lot of people who would lose their jobs. That's the first effect. We know that we are selling more cars in this country today. The American automakers are selling more cars in this country today, making more cars in this country than they're selling. They can't make as many cars, maybe even next year.

There's a fundamental restructuring that's going on. If there is no Chrysler, then you've got GM and Ford fighting over that smaller piece of the pie. I don't think it's very popular for a lot of people who work in the auto industry to see Chrysler go away, but the government, our government right now is saying that Chrysler needs to find a partner to survive.

ROBERTS: All right. Neal Boudette, who's the Detroit bureau chief of "The Wall Street Journal," is with us this morning.

Neal, thanks for being with us. This idea that the White House had a meeting, they brought CEO Rick Wagoner from General Motors to the White House to Washington on Friday and said, if you want the money, you've got to restructure and you have to go.

I mean it has probably happened in the past, but it seems like a really interesting tactic at the very least that you say to the GM -- the Ford, the General Motors CEO you've got to go but you don't say to the president of Bank of America, well, you've got to go too.

NEAL BOUDETTE, AUTO INDUSTRY ANALYST: Well, I wouldn't compare the two situations. I mean, it may be true that they did not do it the right way with the banks but that doesn't mean they should also follow the same formula with the automakers. You have to remember that the guy who's running this task force Steven Rattner is an investment banker. So he's looking at this the same way an investment company would look. And investment companies generally don't want to put money into a company run buy a management team in which they have no confidence.

Then, that's just the case here. They didn't believe Rick Wagoner was the guy to do the job so they suggested, look, we are not going to put taxpayer money in unless we have a management team we believe in.

ROBERTS: So as we said, General Motors has been given 60 days to restructure, they had a plan closing plants, laying off workers, reducing their model lines, the White House didn't seem to think too much of that. Under Fritz Henderson who is going to take over for Rick Wagoner, can they do it? Can they restructure? Can they become the lean mean company that they need to be going forward?

BOUDETTE: Well, they gave very strong hints in the memos they released last night that they are not ruling out some kind of bankruptcy where the government is involved providing financing and allowing the companies to restructure the liabilities they have. I think Rick Wagoner was a real opponent of bankruptcy and Fritz Henderson may have a little bit different view, a softer view of that maybe bankruptcy could work.

ROBERTS: Real quick, do you think bankruptcy would not be the disaster that the auto CEOs said that it would be when they were testifying on Capitol Hill?

BOUDETTE: I'm not convinced that it would be. I'm not convinced that these companies can restructure any other way, other than bankruptcy?

ROBERTS: All right. Neal Boudette for us from "The Wall Street Journal" this morning. Neal, thanks so much.

And coming up this morning, at 8:25 Eastern time, the fired up mayor of Lansing, Michigan, is back. We'll ask Mayor Virg Bernero whether he thinks President Obama is making the right moves for his struggling residents. It's something that you don't want to miss. Virg Bernero never fails to deliver here on the most news in the morning.

CHETRY: And the flood zone in the northwest bracing now for a blizzard. It's a new threat this morning after the Red River reaches its highest level in history. Now a massive snowstorm threatening to possibly make things a whole lot worse. Our Rob Marciano is tracking that for us this morning.

Also pop star Madonna back in Africa this morning. She is trying to adopt another child from Malawi. That's where she adopted her son, David, back in 2006. And not everyone is happy about it. The latest, just ahead. It's 32 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning. Happening right now, Madonna is in court this morning in Malawi trying to adopt another child. A judge just ruled, saying that she will have to wait until Friday to find out if she'll be given the green light.

Meantime, at least one children's group is saying that she should not adopt and that the child would be better off in her own country. Today, Madonna's brushing off those questions from reporters about the controversy.

(BEGIN VIDEO CLIP)

QUESTION: How does it feel to be back in Malawi, Madonna?

MADONNA, SINGER: Amazing.

QUESTION: Can you tell us why you're adopting again, Madonna?

MADONNA: No.

QUESTION: Can you understand people's reservations about it, seriously?

MADONNA: No. It's none of their business.

(END VIDEO CLIP)

CHETRY: Joining me now from London, Dominic Nutt, the spokesman for Save the Children UK. You heard Madonna there say it's no one's business. Over the weekend, you came out, though, and urged Madonna to rethink this adoption. What is your biggest concern?

DOMINIC NUTT, SPOKESMAN, SAVE THE CHILDREN UK: Well, our biggest concern is that we believe that in the most -- in the majority of cases, orphans, so-called orphans, in fact not orphans -- they have at least one parent living -- and even those that don't have a wider family that can look after them. And we believe that children in poverty should be best looked after by their own people in their own environment. And that people like Madonna and organizations like Save the Children are best off helping those families by building schools and supporting them look after these so-called orphans and not transporting them to live across the world in mansions, in pop stars' mansions, that sort of thing.

CHETRY: Now, Madonna also is doing both, I guess you could say, because she founded that organization, Raising Malawi, right, back in 2006, did a documentary as well, trying to bring attention and money to the plight of the children there.

NUTT: Well, absolutely right. So she's obviously accepted the logic of the Save the Children argument, It's help children on the ground. If you really do love a child and you want the child to do well, then help them in their own world.

Now, look. There's something like 10 million children a year die across the world because of poverty before the age of 5. You cannot possibly help all those children by moving them.

So, what we're saying clearly is not that Madonna is wrong or families and parents or want-to-be parents who do go for international adoption are wrong. But it must be a last resort.

They must make sure there is no family network to support them, and if they don't help that child, that child is in peril. The life of that child is in peril. Otherwise, you know, really, you are better off supporting that child in its own environment.

CHETRY: All right, well, here's what a couple of people who actually live there say. One of them is a resident of Chincota (ph), Malawi, who said, "We're poor people. If a child's mother dies, it's hard for the man to bring the child up." He's saying that because apparently in this situation, the child she's trying to adopt, Mercy James (ph), both -- neither parent living, according to our report.

And then I want you to hear also from the Law Commission of Malawi, one member of it, and what he said about this adoption. Let's listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: If you project 20 years from now, where will the child be if the child is left in the orphanage where it is, or if it gets a chance to get an education with Madonna.

(END VIDEO CLIP)

CHETRY: The figures also from UNICEF show that for every 1,000 births in Malawi, 120 children die. The life expectancy in that country is only 44 years old. And most children over the age of 10 do not attend school. So, wouldn't life be better for some of these children who have no living parents, who would at least be in another country where their basic needs could be met and they could get a decent education?

NUTT: Well, would it not be better to solve the problems of Malawi and help Malawians sold their own problems by educating their children and feeding their children and helping their children so they can get off that cycle of poverty? Not just literally transporting the whole population of Malawi.

If we are concerned about the population of Malawi being in a very difficult situation, we can't transport them all to Queens in New York or to Kensington in London to make that difference. The difference has to be made on the ground. Otherwise, we really are shuffling the deck chairs on the deck of the Titanic.

CHETRY: All right, well, they're not necessarily mutually exclusive. So, the question that I have is, is your issue really with Madonna? I mean, you mentioned celebrity and living in mansions. But what about just, you know, some middle-class, you know, working people who are unable to have children themselves and would like to try to help out a child in need overseas. Are you against that type of adoption?

NUTT: No, no. All I'm saying is that it's definitely a last resort. Because I know the pain of trying to have a child. I've been trying, my wife, for years, and we just got lucky four weeks ago. But I know that heartache and that lack of being able to bring up a child in a loving environment.

But we know from our case studies in working in Liberian orphanages that in many cases, thse children are picking off the Internet, without much research going on, and sometimes it doesn't work out, and the children can be sent back to their own country. And all that has happened is that that child's life has been messed around with.

So, of course, it's difficult. And I wish I could give you a easy answer and offer you a magic wand, but if you challenge poverty on the ground in these countries, you can in the end do very well by these children. Save the Children's been doing it for 90 years across the world, and it's making a difference.

It's that -- and you say it's not mutually exclusive, of course, but you can bet your bottom dollar that by investing in children, you'll get a much bigger impact and better outcome than by taking one or two children here and there as a matter of willy-nilly choice.

CHETRY: All right, Dominic Nutt, spokesman for Save the Children UK, thank you for your point of view this morning. And we also want to let people know that we did reach out to Madonna's spokeswoman. So far, we're just getting no comment.

ROBERTS: Well, just hours after people living along the Red River in North Dakota thought they had dodged a huge bullet but now comes the threat of a massive snowstorm. Rob Marciano is tracking the latest from the Extreme Weather Center this morning. He'll have it for us, coming up straight ahead. 41 and a half minutes now after the hour.

(COMMERCIAL BREAK)

ROBERTS: Forty-four minutes after the hour. And the final four is set. The overall number one seed will not be making the trip to Detroit. Second seeded Michigan state stunned Louisville 64-52 to win the Midwest region. North Carolina rounded up the final four with a win over Oklahoma. So let's take a look at the brackets.

UNC goes on to play Villanova next weekend. As for the Spartans, they get a home court edge against UConn on Friday.

And meet the new Tiger, same as the old one. A dramatic 16-foot birdie on the final hole completed Tiger Woods' five stroke comeback at the Arnold Palmer Invitational yesterday. It was his first win since knee surgery nine months ago. Tiger will now focus on trying to win the Masters for the fifth time. That comes up at Augusta in two weeks. I was watching that on a plane as I was stuck on the runway last night. It actually made being stuck on the runway kind of enjoyable.

CHETRY: I was looking at our friendly AMERICAN MORNING you know bracket, not for anything, money or we're exchanging Swedish fish I guess. But a lot of people are knocked out of that thing. So we'll see.

ROBERTS: There you go. Be careful where you place your bets.

CHETRY: Yes.

ROBERTS: We have some snow coming into North Dakota that may complicate the efforts there to keep the Red River at bay. Our Rob Marciano is tracking that for us this morning. How much snow are they looking at, Rob?

ROB MARCIANO, AMS METEOROLOGIST: Several inches in some spots could see a foot. So significant amount of snow and I think the bigger issue is going to be the amount of wind they get with this very slow moving system that's going to track across the northern plains, really going to take a few days to do that. So there will be winds that will be kind of creating waves along the river and banging those waves up against the levees and dikes. So that will put some added pressure on what is already a pressure-packed situation. That's for sure. So here's how the low is going to transpire. It will strengthen somewhat but again it's going to be a slow mover. So the winds will be going on for quite some time. Blizzard conditions expected across parts of the Dakotas, back through Wyoming and Montana. We're already seeing snows, heavy at times, across Rapid City and in through the Moorhead and Fargo area.

New York City is seeing a little bit of showers today but mostly wind as that storm exits. Boston, you'll see some delays. I think the New York Metropolitan airports will see delay, as well Minneapolis, San Francisco and Vegas.

So the snow won't add too much to as far as the moisture that will be flowing down the river but the winds, I think will be the bigger problem as the storm slowly rolls across the northern plains later today and tomorrow. John, back up to you.

ROBERTS: All right. Well, fingers crossed it's not going to create too much problems. Rob, thanks so much for that.

MARCIANO: You got it.

CHETRY: Well, the Chinese are watching, possibly every keystroke you make. They are accused of hacking into computers around-the- world. We're going to be live in Beijing for more on this serious security threat. It's 47 minutes after the hour.

(BEGIN VIDEOTAPE)

CHETRY (voice-over): The day the music died. Another major music chain bites the dust.

UNIDENTIFIED MALE: The clock is running. And the CD as a delivery time for music is over.

CHETRY: Is the CD as dead as disco? You're watching the most news in the morning.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

CHETRY: I was going to break out a dance move but I realized we were on camera. Well in another sign of the times. Virgin Megastore shutting its doors, and the death of the CD was probably written long before the current financial crisis but the economy may be the final nail in the coffin. Our Lola Ogunnaike has the obituary.

(BEGIN VIDEOTAPE)

LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT (voice-over): The party is over at Virgin Megastore, and that has customers singing the blues.

UNIDENTIFIED MALE: The personal touch here, the interaction you get with people is priceless. I mean, you can't get that from a computer.

UNIDENTIFIED MALE: You know you can listen to albums and everything? The fact that it's not going to be there, like we have really nothing to do.

OGUINNAKE: Customers say one of the things they're going to miss the most about the Virgin Megastore is the vast selection. Everything from Annie Lennox to Jasmine to MIA, 20,000 titles to choose from. The other thing they're going to miss is the listening station.

Throw your hands up. The flagship store in Times Square isn't alone. By midsummer, all of their Virgin's U.S. locations will be closed. Experts say they're not surprised. CD sales are slumping while the download business is up more than 20 percent.

ALAN LIGHT, MUSIC JOUNARLIST: What I think we're seeing is CDs are done. The clock is running, and the CD as a delivery system for music is over.

OGUNNAIKE: Tower Records gone. Circuit City gone. Virgin, you guys were the last men standing.

SIMON WRIGHT, CEO, VIRGIN ENTERTAINMENT GROUP: Yes. And I would point out we're disappearing for different reasons. Guys, you know those guys unfortunately, went bankrupt. Our business is, on a store basis, is thriving.

OGUNNAIKE: Profitable? Yes. But not profitable enough. The store's parent company says it can make more money renting the space to another business.

UNIDENTIFIED FEMALE: I don't know where I'm going to go!

OGUNNAIKE: But for music lovers shopping at a record store wasn't business. It was personal.

BILL WERDE, EDITORIAL DIRECTOR, "BILLBOARD": That's where you go to find out about concerts that are coming up. That's where you go to maybe buy your T-shirts. It's where you go to get tickets and kind of made fun of by the record store clerk because you didn't know the B side on this like, you know, import from Japan.

OGUNNAIKE: Did the Internet kill the record stores?

UNIDENTIFIED MALE: It didn't kill our stores directly but it hasn't helped.

(END VIDEOTAPE)

OGUNNAIKE: So, Kiran, do you remember the first album you ever purchased?

CHETRY: "Thriller," Michael Jackson, of course!

OGUNNAIKE: Oh, really? Of course, see, mine was New Edition. "Cool It Now." "Mr. Telephone Man." But I asked my sister the other day if she remembered her first download, she couldn't remember it.

ROBERTS: Download. That's true. It's the end of an era. It's the end of an era, and you now what is going to be in that space in Times Square?

OGUINNAKE: A Forever 21.

CHETRY: Oh, goodness. Well, there you go. A lot of dresses with suspenders and sweaters already attached. How about that? Lola, thank you.

OGUNNAIKE: Thank you.

CHETRY: Fifty-three minutes after the hour.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): Breaking news. First on CNN, new details of President Obama's auto bailout. Already $18 billion and counting.

UNIDENTIFIED MALE: We need customers. We need people with money in their products to buy products.

Plus, warfare deep within the Web. New evidence that Chinese hackers could be watching you and your government on the Most News in the Morning.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the Most News in the Morning.

President Obama unveiling plans for the global economy later this week in London and for the ailing auto industry. Later this morning in Washington, there could be more bailout money for the big three carmakers but GM chief executive Rick Wagoner was forced out as part of a restructuring agreement with the White House. Joining me for reaction to all of this is CNN contributor Bill Bennett, national radio host of "Morning in America" and also the author of the "American Patriot's Almanac."

Bill, what are you hearing from your listeners this morning in this idea of yet another auto bailout, particularly this idea too that the White House said to Rick Wagoner, you got to go?

BILL BENNETT, CNN CONTRIBUTOR: A lot, John, a lot. They're weighing in hard and heavy. We heard a lot from Detroit and Dearborn area. What are people saying? They don like it. They say this is what happens when the government gets involved. They see the logic of it if government is paying and maybe government can call the shots but there is something a little scary to a lot of people about government picking the CEO. A couple of callers said well if they are getting rid of the CEO, the president of General Motors, maybe they should get rid of the head of the UAW, Ron Gettelfinger. So you see where the logic leads. People are upset about it. Most people I think, John, would prefer a managed bankruptcy. If there is anything that upsets people more than companies running themselves into the ground it's the government coming in and taking the whole thing over.

ROBERTS: You know, a fellow who we have on from time to time, David Sirota, a liberal columnist, was also questioning how the government could tell Rick Wagoner to go and no one else. Here is what he wrote in his column. He said "how is it that the White House is requesting the resignation of GM CEO while not doing the same of, say, Bank of America's CEO? Not only is the president not demanding the resignation of bank CEOs, he's actually hosting them for photo ops at the White House. Can anyone explain the differing treatment of auto companies and Wall Street firms?

BENNETT: This is interesting. And I'm glad you said liberal columnist. You know I'm a conservative. David Sirota is a liberal. This is the interesting thing about the Obama positions now. They are being questioned not only by conservatives, by republicans, by centrists but by people on the left and I suppose Paul Krugman, the Princeton economist, who writes on, you know, on economic issues very far to the left is maybe as Obama's supporter. He is maybe his biggest nemesis and now we'll see what happens in Europe, John.

ROBERTS: Yes, on that point, you know, we have the G summit coming up. And the president went to Europe last summer. I mean, the adoration, the adulation that he received. It looks like something I've never seen before. He's still very popular there but there are a lot of people very skeptical of his economic plans. A lot of people angry at the United States for as they believe precipitating this economic crisis.

You know, we pointed out that the EU president, the prime minister of the Czech Republic said that the Obama administration's designs and plans for fixing the economy are, "way to hell."

BENNETT: Yes. Well, we shall see. You know a lot of us who supported John McCain said after the election, OK, congratulations to President Obama, maybe the fact that he is so widely admired in Europe will help with some things. He is encouraging European countries to spend like we're spending and they're saying no way, they're broke, first of all. They don't have that kind of money. So we shall see. But many case, the honeymoon is ending. Reality has hit the road here and we'll see what happens in Europe.

But as a political strategy, it's amazing to me to watch. Instead of doing one big thing, he's doing about 20 and drawing all of the fire from all sides right now.

ROBERTS: But he is trying to say though that he's got a lot of things that he has to do and he has got to get all of those things on his plate and try to take care of them. Bill Bennett for us this morning. Bill, good to see you. Thanks so much for dropping by.

BENNETT: Thanks, John. As always.