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American Morning
Toyota's Top Execs Talking; Cruising for A Cause
Aired February 05, 2010 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Well, good morning to you on this Friday, February 5th. Glad you're with us on AMERICAN MORNING. I'm Kiran Chetry.
CHRISTINE ROMANS, CNN ANCHOR: And I'm Christine Romans, in for John Roberts this morning. Happy Friday, everyone. Here are the big stories we'll be telling you about in the next 15 minutes.
A surprise press conference this morning featuring the top executive of Toyota, someone we haven't heard from yet. He's apologizing for that company's safety problems.
Meanwhile, there are new problems for Toyota today. One of its Lexus hybrid models may now have a brake problems like the ones found in the Prius hybrid and another massive recall may be on the way.
CHETRY: Well, the party's on in Nashville, Tea Party supporters pouring into the city for the first ever national convention, and CNN is putting a spotlight on the growing political movement with the best political team on television. We're going to look at one way they organize, by cruising for Conservatives. It's the last part of our special series.
ROMANS: And a powerful winter storm is taking shape and heading east. Up to 2 feet of snow expected in some places. Flights are cancelled. Forecasters are warning tonight's commute will be, quote, "nearly impossible". Our Rob Marciano's on top of it all, and we'll have the latest on the snow that's coming in a moment.
But first, in a surprise press conference, an apology this morning from the CEO of Toyota for the first time since the automaker recalled millions of vehicles last month.
Let's get right to Kyung Lah. She's live on the phone in Japan right now at the press conference. Kyung, this is a - a nightmare for Toyota. What's going on inside right now?
KYUNG LAH, CNN INTERNATIONAL CORRESPONDENT (via telephone): Well, as you mentioned, that this is a surprise presser. This also a very hot topic (ph). This is something that we do not ordinarily see in Japan. You normally get a lot of deference for a president of a company, but there are a lot of tough questions -- questions about where was your leadership, why aren't you answering our questions directly.
We did get an apology, and we did get a plan from Akio Toyoda saying that he's going to be setting up a global committee to examine those problems. But beyond that, we didn't get a whole lot of specifics.
We did hear from him and the vice president who said we were not intentionally hiding the issue. That was the specifically in response to whether or not the company actually is revealing everything about the 2010 Prius. The vice president is saying that we have disclosed information and we have no intention of hiding this information or holding it back.
And when asked, "Where have you been all of this time, Mr. Toyoda?" He says, "I must say, it is not what you have mentioned," he is not hiding, and we have one voice in the management and that he is here for the customers.
So, you have a president here, Christine, who is trying to say that he is here for the customers, but a lot of frustrated reporters who say this is -- certainly seems like too little too late.
ROMANS: Frustrated -- and frustrated customers frankly (INAUDIBLE) say, we're here for the customers. We've been asking questions for a week now about what we should be doing with our cars, whether they're safe to drive, how long it will be before they can be repaired. And even if there are other issues in the global supply chain, we don't know about.
Any word about why this has been so hastily arranged? Nine p.m. on a Friday night in Tokyo, two hours away from Tokyo, with such little notice. You know, by western standards, it would seem as though this is trying to get this out there, but not without a lot of attention.
LAH: Yes, not without a lot of effort on our part. I mean, we ran and we barely made it here for the news conference, plugging in as all of this is happening. A lot of reporters here certainly are sweating right now, because we're all on a run here. So, certainly, there is this feeling, a sense that why did you hastily arrange this, as you say?
But what they are saying here, according to the CEO and president of this company that "I am here now and answering questions and here for the customer." But it certainly doesn't appear to be that way, when I am looking at my clock here and it's almost 10:00 p.m. on a Friday night.
ROMANS: And one last question, you know, there are talking about how they're going to arrange a global quality control, panel or a new processes for global quality control, people right now are asking about quality control, the cars that are in their garage. There are still some very immediate issues here for this company that haven't been answered it, am I right?
LAH: Yes, absolutely right. We're still waiting for those answers.
So, yes, they can set up this committee, but what a lot of the consumers, the people that have to sit behind these cars every single morning and drive to work, take their kids to day care, they want to know, is my accelerator going to stick, is my gas pedal going to fail. And that, they really didn't hear yet, Toyota saying that they have a very big job ahead, that they are going to step up their efforts to try to regain customer trust, but certainly, they have a long way to go.
ROMANS: Kyung Lah, thank you so much, on the phone from Tokyo -- or from Nagoya actually, after -- about two hours from Tokyo, after that press conference.
CHETRY: Just looking at the whole procession from the questions about floor mats to where we are now and possible talk of recalls. I mean, really, for Toyota, this is a major, major problem.
And there are other problems this morning that are coming to light for Toyota. Brake checks are now being conducted by the company on Toyota's Lexus hybrid 250H. It may have the same braking problems that are plaguing the Prius. And although Toyota says the Prius does not need to be recalled, there are several published reports that indicate a Prius recall could be coming.
ROMANS: OK. Right now, Toyota is also under investigation. Federal safety regulators in this country want to know about more of the brake problem in the Prius, specifically when Toyota found out about it and why it failed to inform the public. At least 124 drivers in this country have filed a complaint.
One driver who's had problems with her Prius is our own Jessica Yellin.
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Here's what happened. Sometimes, when you're driving slowly over an uneven surface, or a slippery road and you hit a grate or a pothole, you step on the brake and they don't respond for a moment. It's as if the brakes aren't getting traction with the ground, and you just slip, which obviously can be really scary.
The breaks respond just fine when you're moving at a high speed, or if somebody were to jump in front of the car, I'm sure it would stop, it's just a problem at slow speeds over those really bumpy surfaces.
I have been calling and emailing with Toyota about this problem since last October, with no resolution. So, I decided to try again today. Nobody contacted me to even say, "Hey, we realize this is a problem, it's being looked into." So they say that Toyota doesn't know that there is any kind of braking problem. There is no solution because they don't know -- there wouldn't be a solution because they're not acknowledging a problem, and they're cooperating with the government's investigation.
(END VIDEOTAPE)
CHETRY: There you go, from Jessica Yellin herself who owns a Prius.
ROMANS: A frustrated consumer and a frustrated reporter.
CHETRY: Well, if you own a Toyota, you're not really sure what to do, you're not alone. You can head to our Web site, CNN.com/Toyota. You will find out the status of the model you drive, as well as what to do, if you notice of any these problems, with the braking or the gas pedal problem.
ROMANS: All right. Also, developing news in the financial front and the possibility your money could take another hit today. Listen, folks, the Dow tumbled 268 points yesterday. There's a sense of concern coming back on Wall Street.
Just look at something we called the fear gauge, up 21 percent yesterday. That spike fuels by growing deficits overseas, concerns about this nation's unemployment and this growing unease that maybe the recovery could be in jeopardy.
And in about half an hour, new job numbers will be released by the Labor Department. Economists are predicting a slight improvement, some jobs creation maybe in the month. But the government is also expected to come out and say, actually, we're revising a year's worth of job losses and the recession, we under\counted how many jobs were lost maybe by 800,000. We're going to break it all down for you at 8:30 Eastern Time with an economic analysis from Lakshman Achuthan and Jill Schlesinger, she's editor at large at CBS MoneyWatch.com.
CHETRY: All right. We'll look forward to that. And also, we have some new developments this morning in the case against the man accused in the Christmas Day bomb plot. A law enforcement official telling the "Associated Press" that Umar Farouk Abdulmutallab has flipped on the cleric who was allegedly his teacher and is helping the FBI now find him, that this could prove critical in the investigation, because the cleric is an accused al Qaeda recruiter who's also been tied to the 9/11 hijackers.
There are also some major developments out of Haiti this morning. The headlines are reminders of the misery, even as the world begins to drift away from the history. Haiti's prime minister saying last month's earthquake has now killed 212,000 people. Former President Bill Clinton is coming back to Haiti today. The U.N. special envoy for Haiti is now also overseeing efforts in reconstruction and aid.
Also right now, 10 American missionaries are behind bars without bail after being charged with kidnapping more than 30 Haitian children. Conviction on a child's kidnapping charge in Haiti carries a maximum penalty of life in prison. Haiti's prime minister talked to Larry King about the next step.
(BEGIN VIDEO CLIP)
JEAN-MAX BELLERIVE, HAITI PRIME MINISTER: It's clear that these people violated the law. What we are to understand, you can do it in a good faith, or if they were linked to other traffic. So, I'm not in a position to decide that. It's the job of the judge or the jury. (END VIDEO CLIP)
CHETRY: The prime minister also said that the judge could take up to three months to decide whether or not to prosecute these 10 Americans.
ROMANS: Meanwhile, here, we are watching a huge monster storm brew its way from rain in the south to snow, big snow expected in the east. Rob Marciano is tracking it for us.
What is it, National Weatherperson Day?
CHETRY: Yes, it is. It's National Weatherpersons Day. And you're tracking a blizzard.
ROB MARCIANO, AMS METEOROLOGIST: You know, what better way to celebrate of the holiday, huh?
CHETRY: I guess -- for you guys, I guess so. For everyone else...
(CROSSTALK)
MARCIANO: Nothing like a good storm for the weather geek to get amped up. Those who have to suffer through it, I apologize ahead of time. But it's a doozy. And if you do like snow and you live in D.C. to New York City, you're going to like this forecast. And timing almost perfect to make it for the entire weekend, but chunk of it coming today.
Look at the moisture coming in from the Gulf of Mexico, this has -- the atmosphere just laden with deep moisture and that's (INAUDIBLE) when you're talking about running into a colder air. So, thunderstorms rolling up the southeast and getting into Virginia. We're starting to see now some of the snow, Lynchburg, Martinsville seeing some snow, sleet reported in Raleigh. But no snow in D.C. yet. So, not all of this is hitting the ground just yet. But it will as the day rolls along.
Look at the expanse of weather warnings or winter storm warnings all in the red from the Ohio Valley through Pennsylvania, down into North Carolina, and the pink you see there in New Jersey and Delaware, that is a blizzard warning. So, the winds will be blowing as well, sideways, and that will reduce visibility. Sixteen to 24 inches expected in D.C.; 12 to 18 inches expected in Philadelphia. And right now, we are going for four to eight inches in New York City.
Quite a storm on this sacred scientific holiday. We'll have much more in about 30 minutes.
ROMANS: You can't see that he's piled up with all kinds of presents and gifts and candies...
CHETRY: Right.
ROMANS: ... that people have been sending him. CHETRY: Presents are welcome, but cash is preferred...
MARCIANO: Always. Always.
CHETRY: ... for Rob Marciano on National Weatherpersons Day.
ROMANS: All right. All right. They are literally coming at the wall. Take a look at this -- a swarm of Brazilian Free-tailed Bats -- yes, bats -- they have taken over a foreclosed vacant home in Port St. Lucie, Florida.
(CROSSTALK)
CHETRY: ... and that's creeping me out a little.
ROMANS: Every night around dusk, they come swarming out. The bats are common there because they help the mosquito population certainly.
CHETRY: See that?
ROMANS: Neighbors have been sealing off their own homes. They say the worst part is the smell. A bat expert -- the smell -- a bat expert says even if someone paid to remove the bats, they would still come back.
CHETRY: Does that creep you out? They are really cute when you see them up close.
ROMANS: No, they're not. There's nothing cute about them.
CHETRY: (INAUDIBLE) vampire. They're really cute.
ROMANS: No, under no circumstances.
CHETRY: Right. They come crawling out of the house. Oh, even that creeps me out.
Well, today, we're going to talk about the top tea party minds. There is a seven-day cruise featuring 100-plus conservatives and they are talking tea party. Why they signed up? Our Jim Acosta is going to be joining us with more.
Ten minutes after the hour.
(COMMERCIAL BREAK)
(MUSIC PLAYING)
ROMANS: All right. Welcome back to the Most News in the Morning. It's 12 minutes after the hour.
A grassroots movement that exploded last year is now trying to cement itself on the national political scene. The first national party convention is now under way in Nashville. And all this week, CNN is cutting through the noise and taking a comprehensive look at the real issues that people brought here in a special series, "Welcome to the Tea Party."
CHETRY: The tea party convention actually started with a bang last night as conservative fire bird Tom Tancredo, the former Colorado congressman and presidential candidate used his kickoff speech to rail against President Obama with some controversial language.
Now we are looking at the issues people brought here in a special series, welcome to the tea party.
(BEGIN VIDEO CLIP)
TOM TANCREDO (R), FMR. REP., COLORADO: Who could not even spell the word "vote" or say it in English...
(CHEERING)
TANCREDO: ... put a committed socialist ideologue in the White House, t his name is Barack Hussein Obama.
(END VIDEO CLIP)
ROMANS: All right. You find tea party supporters though in the darndest places like onboard a cruise in the Caribbean.
CHETRY: Yes. And our Jim Acosta has the final installment of our special series, "Welcome to the Tea Party."
Jim, you've done a great job on this. I just have to ask you about this Tom Tancredo...
ROMANS: Yes.
JIM ACOSTA, CNN CORRESPONDENT: Right.
CHETRY: ... because it's very controversial what he said. I mean, he has basically disparaging, you know, immigrants. He was talking socialists. He was saying that Barack Hussein Obama. Others like Alan Keyes, in your piece, we're going to see, question whether or not the president was born here.
ACOSTA: Right.
CHETRY: And how is this out of the social, the fiscal conservative moment that started many people involved in the tea party? How does that jive?
ACOSTA: Yes, and it's a big question, because there's a new CNN poll out this morning that shows 47 percent of Americans have little or no knowledge about this movement. They don't know about these guys. They hear tea party, and they think, is that what our little kids do, you know, when they get home from school?
No, this is a big political movement. And you got to wonder whether or not rhetoric like what you just heard from Tancredo is going to hurt their cause. There's a lot of well-meaning, well- intentioned folks who go out to these rallies. I've been there, I've seen them. I've talked to them.
ROMANS: Who don't agree with Tom Tancredo...
(CROSSTALK)
ACOSTA: Who don't agree with that sort of thing but it's inescapable.
You know -- you know, there are some tea party folks who say, "How come you guys in the media always show those pictures, those signs, or show those sound bytes of those folks saying those things. Well, what if we didn't? We would just be sugar-coating what was happening at these events. And, you know, the rhetoric is no less heated out on these cruise ships where some of these events are going on.
And we decided to go out there, because as we mentioned throughout this series, the tea party is not a political party. They are starting to organize in new ways. There is a convention this weekend that is happening in Nashville, and then the rallies that happen all over the country, the web sites, but how about a tea party cruise?
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): Onboard this cruise ship easing into the U.S. virgin islands, among the thousands of passengers ready for some fun in the sun.
People are not just ready for this mad charge to the left.
ACOSTA: Members of a rising American political movement are having a meeting of the minds. Led by former Republican Presidential Candidate, Allen keys, more than 100 conservative and tea party activist and their families rented out space on this ship for what was built as the cruise for liberty.
We believe in free enterprise.
ACOSTA: Organizer, Michael O'Fallon markets this seven-day voyage as a chance to talk politics in paradise.
MICHAEL O'FALLON, SOVEREIGN CRUISE PRESIDENT: Right now, people are wanting to be with other conservatives. They maybe feel like they are out on an island some place by themselves...
ACOSTA (on camera): So to speak.
O'FALLON: Yes, so to speak, yes, exactly.
ALAN KEYES, FORMER PRESIDENTIAL CANDIDATE: Give everybody access to health care. And if you don't want it, we will shove it down your throat.
ACOSTA (voice-over): At the pre-cruise kickoff at this Miami hotel, Keys explains why he believes the tea party is gaining steam. KEYES: I think it's quite obvious that this is not about Republicans and Democrats, it may be about the failure of both parties and the whole party system.
ACOSTA: Conservative activist Allan Gottlieb sees a golden opportunity.
People, a lot of people, have never been involved in politics before. They know nothing about politics and they are extremely naive, and they are angry and they are upset and they are venting their frustrations by attending these rallies.
ACOSTA (on camera): Your job is to get those people involved?
Capitalize them, mobilize them.
FLOYD BROWN, CONSERVATIVE ACTIVIST: We could easily slip back into slavery.
ACOSTA (voice over): Cruise for liberty speakers Floyd and Mary Beth Brown have a website calling for President Obama's impeachment.
MARY BETH BROWN, CONSERVATIVE ACTIVIST: I know all of us need some encouragement in fighting this battle, and some are against Obama, who is trying to destroy America. We love America and our fellow patriots.
ACOSTA (on camera): When it comes to President Obama, this is no love boat. Liberal critics of these conservative expeditions to the Caribbean, say they are another picture perfect example how the tea party movement can sometimes go overboard.
ACOSTA (voice-over): Democratic strategist, Jamal Simmons worries that some tea party events on shore and off, is getting out of hand.
JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Are we just talking about voting differently or are we talking about something a little more edgy than that.
ACOSTA: Want edgy, Keyes refers to the President as the present occupant of the oval office. He still questions Mr. Obama's citizenship. Even though the White House and the Republican governor of Hawaii where the President was born, have produced evidence refuting the charge.
KEYES: I don't see how you impeach somebody who may not be president in the first place. So because -- if according to the constitution, you are not eligible for the presidency, and that does turn out to be the case, then Barack Obama was never president. You don't impeach...
ACOSTA (on camera): How can that be?
KEYES: I'm sorry, you don't understand what constitutional government is all about. ACOSTA (voice-over): Later this year there will be more tea partiers in the Caribbean aboard the Liberty Ship and the NewsMax cruise sponsored by the popular conservative website. But the founders of one leading tea party group, wonder whether this is the best use of the movement's time during an election year.
ACOSTA (on camera): Would you go on a tea party cruise?
JENNY BETH MARTIN, CO-FOUNDER, TEA PARTY PATRIOTS: You know, we are working about 20 hours a day. I cannot even imagine any cruise, much less a tea party cruise.
No we have no time for cruising.
ACOSTA (voice-over): But other tea partiers on this trip argue hitting the high seas is just a new way of cruising with a cause.
(END VIDEOTAPE)
ACOSTA: Now we should mention that the folks over at Carnival Cruise Lines did send us a statement emphasizing that they do not necessarily agree with the statements made during this event, and they say they rent out their ships all the time to private groups, and Cruise for liberty was just one of them. But, one last word on the cruise ships, was talking to one of the organizers of these events. He says you know who they want to get out there, Sarah Palin. They love to have a Sarah Palin cruise.
CHETRY: I thought you were hoping you'd say, ah, so we just have an excuse to be on a cruise.
ACOSTA: The American Morning cruise. Let's do it, let's go.
CHETRY: Broadcasting live, three hours every morning. I love it, "Minding Your Business" from the Gulf of Mexico, I would love it.
ACOSTA: We have the technology.
CHETRY: All right we love it. Thank you so much. Take care, Jim.
ACOSTA: You got it.
CHETRY: Well, you can go to our Web site, by the way, cnn.com/amfix and post comments with what you have been seeing all week with Jim on his blog.
ROMANS: All right in about ten minutes we are going to get some pretty important news about the job situation. Have we finally turned the corner and created jobs in this country? Maybe. But we also probably lost a lot more jobs than we thought during the recession. We are going to get an actual tally from the government, and it's incredibly important for your ability to get a job, and we will tell you exactly what these numbers mean for you and your day-to-day work when we come back.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. It's 23 minutes past the hour right now. We are "Minding Your Business" this morning and doing a little sports as well, the big game is this Sunday, but just as important as the Super Bowl is what you are going to eat before and after the game.
Of course we know, pizza, the quintessential Super Bowl party food. Pizza orders in fact spike by 35 percent for the Super Bowl compared to a typical Sunday. The feeding frenzy though is relatively short-lived. The owner of one New York pizzeria puts it after half- time comes, it's a ghost town.
ROMANS: And remember how excited we all got when it finally came out with the squeezable catsup bottle, remember? Well, it's time you can be happy about catsup. The Heinz company is unveiling its new and improved and bigger catsup packet. Look at that, it works 2 ways. You could peel off the top and dunk your fries. No more messes from the kids at the back seat of the car. The kids, for me, trying to drive and eat french fries, or you can tear the end and squeeze out the catsup. So, 2 new ways.
CHETRY: And it's also they say three times as much catsup up in there. Because you know the packets are never enough. So you have to bite, squeeze, bite, squeeze...
ROMANS: And you leave all that good catsup in there.
CHETRY: What I don't understand is that other companies, I mean they have, McDonald's has had dipping sauces for years, and Smucker's, they manage to put their jelly in a container.
ROMANS: Some things are just slow to change.
CHETRY: All right, well, coming up, a house and a restaurant really divided by the Super Bowl. It's a couple, a married couple. He happens to be from New Orleans, but he is rooting for the Colts. She is from Indianapolis, she is rooting for the Saint, and the place looks like Mardi Gras. We are going to take you there. The owners of Saygus restaurant, talking to us live at 8:50 Eastern.
ROMANS: And we are also going to talk about job losses, 6 minutes, 5 and a half minutes, we are going to know, just what the job situation looks like. Is it getting better or is it getting worse and what it means for you in your job or your job search right now.
(BEGIN VIDEOTAPE)
More than two weeks after the earthquake, Bobby Duvall is overwhelmed. The soccer field he built for kids is now home for hundreds.
BOBBY DUVALL, CNN HERO 2007: It's really something. We were already in a hole. Now we are in much deeper hole.
Duvall was a CNN hero in 2007. He founded a soccer training center called athletics of Haiti, giving kids from some of the poorest neighborhoods in Port-Au-Prince an opportunity to get off the streets and play a sport and get a meal.
DUVALL: The kids never missed practice, and they disciplined enough to keep focus on something positive.
That program is now a life saver. Many families of the children who played soccer for Bobby have now moved on to the field with nowhere else to go.
DUVALL: What we are trying to do is just keep it clean, give them a little bit of, you know, set up some bathrooms and some water, and give them care. That's all. Understanding. So they are safe here.
Safe and sheltered. Duvall provided what tents he had, and those without them have gotten more creative.
(on camera): Are these goal posts, too?
DUVALL: Goal posts, yes.
Somebody made a little home out of goal posts.
DUVALL: Right.
(voice-over): Some kids still play soccer to past the time. Families are making do the best they can.
DUVALL: Save as many as you can, and serve as much as you can. That's it.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
ROMANS: All right, it's 28 minutes past the hour, and that means it's time for an "AM" original, something you will only see on American Morning. Our relationship with China is a delicate one right now, whether it comes to money or power.
CHETRY: Yes, and now another issue is threatening to throw everything else off track. Our Jill Doherty has details of the dispute live from Washington this morning. Hi, Jill.
JILL DOUGHERTY, CNN CORRESPONDENT: Well, you could call it guess who is coming to visit the White House, and that is the spiritual leader of Tibet, the Dalai Lama. But the reaction in Beijing is anything but serene.
(BEGIN VIDEOTAPE)
DOUGHERTY (voice-over): Chinese officials already were fuming warning there would be consequences if President Obama met with the Dalai Lama, in their eyes a dangerous separatist. The White House announcement that the meeting will take place this month throws fuel on the fire. Mr. Obama also is hawking U.S. arm sales to Taiwan, 6 billion dollars worth, for China's independent minded province. Beijing, furious, cuts back on military to military cooperation to the U.S. Secretary of State, Hillary Clinton, calls out china on internet freedom.
HILLARY CLINTON, U.S. SECRETARY OF STATE: We have seen a spike in threats to the free flow of information.
DOUGHERTY: China lashes back, accusing the U.S. of information imperialism. While Chinese cyber attacks pushes Google to threaten to pull out of the Chinese market.
Just last November, Mr. Obama was in Beijing shaking hands with President Hu Jintao, but one China watcher says there was a price for making that trip go smoothly.
DOUGLAS PAAL, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Between the election and November, Mr. Obama really stayed away from the difficult subjects of Taiwan and Tibet, but eventually he has to deal with them.
FEYERICK: Could these disputes torpedo relations between the world's largest economy and world's third largest economy?
SEN. ARLEN SPECTER (D), PENNSYLVANIA: We have China violating international law with subsidies and dumping, really a form of international banditry.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We approach that we're taking is to try to get much tougher about enforcement of existing rules. Putting constant pressure on China and other countries to open up their markets in reciprocal ways.
FEYERICK: China holds $800 billion in U.S. debt. But Washington also needs Beijing's diplomatic help on tough issues. Like North Korea and sanctions on Iran.
U.S. officials and China experts agree Beijing is becoming more assertive. Some Chinese see the U.S. as bogged down in a financial crisis, and two wars.
PAAL: The people are saying, a tit for a tat, don't take it anymore. Don't bend on to the foreigners.
(END VIDEOTAPE)
FEYERICK: And that's the danger that emotions can get out of control especially at this tense economic time. As on U.S. official told us, the -- there are a lot of issues where we're going to have collisions, but we want to make sure that they're the fender bender variety. Kiran? Christine?
KIRAN CHETRY, CNN ANCHOR: All right, Jill Dougherty for us this morning. Thanks so much.
Meanwhile we're crossing the half hour. Time for a check of our top stories this morning.
Toyota's chief executive is apologizing for the automaker's safety problems. He says he is setting up a task force to raise quality control. At a hastily called news conference that started about 90 minutes ago in Japan, Akio Toyota was asked if his company had withheld information from customers about break problems with the Prius. And he would only say that Toyota is committed to cooperating with safety regulators.
CHRISTINE ROMANS, CNN ANCHOR: The Pentagon has decided for the first time to require military bases worldwide to make some more morning-after pill available. The new policy was recommended by an independent panel of doctors and pharmacists. The Bush administration had resisted this change. Over-the-counter sales of the emergency contraceptive were approved by the FDA in 2006.
CHETRY: Haiti's government now charging all 10 jailed American missionaries with kidnapping. They face a maximum sentence of life in prison, but they could have to wait up to three months to find out whether or not they'll actually stand trial. Haiti's prime minister telling Larry King it's now up to the courts.
(BEGIN VIDEO CLIP)
JEAN-MAX BELLERIVE, HAITIAN PRIME MINISTER: It's clear that those people violated the law. What we are to understand if they do it in good faith or if they will lead to other traffics. So I'm not in the position to decide it. It's the job of the judge or the jury.
(END VIDEO CLIP)
CHETRY: The missionaries were taken into custody last Friday as they tried to cross into the Dominican Republic with 33 orphans. The Americans have said they were trying to help orphans. I should say 33 children because we found out since from some of the great reporting by Karl Penhaul that many of the children, actually in some cases, as high as two thirds of them, did have a living parent.
ROMANS: All right, just in to CNN. The latest jobs numbers came out just moments ago. Looks like the unemployment rate fell unexpectedly.
Allan Chernoff joins us now with the details.
Hi, Allan.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Right. A little bit of good news here. Keep in mind, we have two separate surveys from the Labor Department. The headline, first of all, the unemployment rate down to 9.7 percent from 10 percent. So that is a little bit of bright news.
The other survey that the government does actually showed a slight decrease in the number of jobs during the last month during January. A decrease of about 20,000. We had been expecting a gain of about 15,000 from economists surveyed, that according to the Bloomberg survey.
So down by 20,000. It's not a huge number in the bigger picture.
Now, there's also an important revision going back a further month back to November, a gain of 64,000. Previously the gain had been 4,000. So overall, this is actually showing a little bit of signs of brightness? A little bit of improvement in the labor market, not the continued disasters.
Now there is one other note that we need to talk about, and that is in terms of the number of jobs actually lost during the recession. The prior estimate from the government had been 7.2 million, now it's 8.4 million.
And I don't think that's any surprise to people out there. We know that the jobs lost...
ROMANS: Right.
CHERNOFF: ... during the recession has been simply disastrous.
ROMANS: One thing we like to look at, too, is, you know, how it breaks down for different groups. And for mostly for teenager, so very, very difficult. For blacks, 16.5 percent unemployment, Hispanics 12.6 percent unemployment.
Most of these did not change. But actually the unemployment rate fell for adult women to 7.9 percent. Still that idea that this is a man's session or he-session, and women have fared a little bit better. A woman's unemployment rate a little bit better than anybody else. And so there's a lot of numbers to dig in here. Very interesting stuff.
CHERNOFF: Overall, the bottom line is this is not another disastrous report. Some signs of a positive trend in the employment situation. Let's see how the markets respond.
ROMANS: Right. Of course.
CHERNOFF: The markets are very, very jittery.
CHETRY: And as we talk about the Dow, 10,000 over that psychological number. The fact that we're under double digit employment doesn't change if you're out of a job, but what does it mean for the administration?
CHERNOFF: And I should also say something, you know. Yesterday everybody was saying oh, the jobs numbers worries, that's causing the market to really tank here. The truth is the market cares about economic growth and profits, not that much about unemployment.
CHETRY: Yes.
CHERNOFF: Employment -- unemployment can be disastrous, and the Dow could soar.
CHETRY: Right.
CHERNOFF: Which is what's we've seen over the past few months.
ROMANS: Because we know that unemployment -- there's something new in there in that story.
OK, Allan Chernoff, thanks so much. We're going to digest this jobs report. You know what does this mean for you, what does it mean for your job prospects? What does it mean for the job you have right now. Lakshman Achuthan and Jill Schlesinger will be with us live in just a moment.
(COMMERCIAL BREAK)
ROMANS: Welcome back to the "Most News in the Morning." And just in a little bit of good news. The Labor Department releasing its January jobs report. The unemployment rate dropped. It dropped to 9.7 percent.
Joining me to break it down, Lakshman Achuthan, economic analyst and managing director of the Economic Cycle Research Institute. And Jill Schlesinger, editor-at-large at CBSMoneywatch.com.
All right, when we talk about good news, there's a really big asterisk next to it. Because 9.7 percent just -- it really -- it's just not good for America. But it is better than we thought.
Why did it fall, do you think?
LAKSHMAN ACHUTHAN: Well, it's derived from the household survey. The household survey had over half a million jobs created in it.
ROMANS: Right.
ACHUTHAN: Which is a little different than the headline payroll survey that shows minus 20. So it's two different surveys. But basically it looks as though the unemployment rate may have peaked at the earlier unemployment level. If it didn't peak already did not peak, I think it still will peak by the first half of this year, because this overwhelming trend we've seen for much of last year into this year is one of an improving labor market than minus 20 notwithstanding.
ROMANS: An improving labor market? Unemployment rate peaked? Good times are ahead?
ACHUTHAN: Yes.
JILL SCHLESINGER, EDITOR AT LARGE, CBSMONEYWATCH.COM: All right, don't go crazy.
(LAUGHTER)
SCHLESINGER: Yes, I mean, job loss is tapering off. That's the good news. If you don't have a job, it is still so hard to get a job. And that's what we're really seeing here. This is the divergence of data, where you say, wow, people who look at data like knuckleheads like us say, wow, it's great news. But if you don't have a job it is still very hard to get a job.
ACHUTHAN: Yes.
ROMANS: How can we -- and we see that they are temporary jobs increased. We see retail jobs increased, and we also know that people are working, you know, we have a very short workweek which means there's not a lot of work for people.
ACHUTHAN: Workweek actually -- it doesn't move a lot but it actually moved up a tenth of a point so it's a good thing. Earnings...
ROMANS: And so that's good. That means more hours...
(CROSSTALK)
ACHUTHAN: Earnings actually went up more than expected. If you look at the revisions, some of them are nasty. And we've been talking about the big numbers, but we also see in November, a plus 64,000 out of there.
ROMANS: Somehow $64,000...
(CROSSTALK)
ROMANS: November didn't feel that great to me. But look...
ACHUTHAN: There's a lot of cross currents here. We're just about to break through the surface.
ROMANS: Look, we all know it's going to be difficult and choppy probably here. I mean this is the way it looks after coming out of just such a horrible time. There's a big revision there so we know that we lost another 800 some and thousand jobs...
ACHUTHAN: Yes.
ROMANS: ... that we didn't know about which brings the total job lost in the recession to 8.2 million which feels really tough for a country, doesn't it?
SCHLESINGER: Absolutely. But, again, it's history. It already happened. Thank God we've lived through the worst of it. We are now in the rebuilding phase.
By the way, at the end of the recession, all the data gets very choppy.
ROMANS: Yes.
SCHLESINGER: That's really kind of weird cross currents week to week, month to month. If you look at the last three months, the trend is actually improving. That's what we need to concentrate on. And while we need jobs created in this country, I can guarantee one thing. This is a very strong and resilient economy, and it will happen.
ROMANS: Let me ask you what's happening in the stock market then. Because we had a really rough day yesterday. We're talking about Dow 10,000. It barely closed above there. Looks a little rough again this morning. And you're hearing talk about other European countries and their debt problems, and how much debt they've taken on to get themselves out of this mess.
How much concern do we have about this budding economic recovery in the U.S. from what we're seeing elsewhere?
ACHUTHAN: I -- I would say none. OK? There is a, I think, lot of misplaced fear that the difficulty in getting deposit of jobs growth rate right here right now or what's going on in Europe or some other smaller countries is somehow going to bring a double dipper recession, or we're going to return to like the fall of '08.
ROMANS: It's not going to happen.
ACHUTHAN: But it's just not -- not going to happen. There's no way.
SCHLESINGER: Yes. I agree with that. And I think that these countries, so-called PIGS, where it's...
ROMANS: Portugal -- right.
SCHLESINGER: ... Italy, Ireland, Greece and Spain.
ROMANS: You're going to hear that again folks. The PIGS countries, right.
SCHLESINGER: And it's not that nasty girl you grew up with. And the thing that's important about those countries is that they aren't representative of what's going on in the United States. We're talking about Moody's maybe downgrading U.S. funds. That's an overblown thing.
You know what happened? The market went up 70 percent. It needs to take a breather. It's normal. If you're contributing to a 401(k), you should be praying for the markets to come back.
ACHUTHAN: And the market is not the economy. These are two separate different things. They turn at turning points by about six months at different -- you know, different time frames. And here, we're in the first quarter of positive jobs growth. That we can take to the bank here. That's what's going on.
ROMANS: So for the people who are not going to read this 25-page report...
ACHUTHAN: Yes.
ROMANS: Quickly, in five words or less, you've got a job or you need a job, your advice? ACHUTHAN: Look, now is the time to either upgrade or to get a job, because now the business cycle is your friend, right here right now.
SCHLESINGER: If you need a job, network like crazy, keep pushing, you're going to see a turn. There is a thaw right now.
ROMANS: A thaw right now.
ACHUTHAN: Yes.
ROMANS: OK, Jill Schlesinger, Lakshman Achuthan, thank you so much. Both of you. Kiran?
CHETRY: All right. Thanks, guys. So we'll leave the jobs talk for a second and we're talking about a major, major storm. That's coming our way. A blizzard warning powering its way through the mid- Atlantic states. We're going to be talking about exactly where this might hit, how it may affect your travel plans as well. Rob Marciano in our Weather Center. Forty-four minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: A little cloudy there in Miami, it's 75 degrees and it's going to go up to 80 degrees a little bit later. Still set to be cloudy, but hey, it's the spot for the Super Bowl, it's also probably got to be one of the best spots in the country, right -- right around here, especially, Rob, as we look at that storm getting ready to brew.
ROMANS: We're going to be grilling in the snow while they're in the sun for the Super Bowl.
CHETRY: Exactly.
ROMANS: Hey Rob.
CHETRY: Blizzards somewhere.
ROMANS: Yes, hey Rob.
MARCIANO: Sound like a good Super Bowl party, I mean, if you can't be in Miami and why not grill in the snow? It was a lot worst from the cold.
CHETRY: Yes.
MARCIANO: I like you guys, I like the attitude as well as this storm, you know, you may -- you may start to get a little bit winter weather-weary across the east, especially through the D.C. and Delmarva area. Another double-barrel low coming your way and this one looks to be as potent as the last one.
A decent amount of moisture coming from the Gulf of Mexico and it's all streaming all up the Carolinas and into the Virginia. Now, we're starting to see rainfall -- snowfall rates here of about an inch an hour and it's -- and that's drifting towards D.C. Not quite snowing yet, it may briefly mix in with a little bit of sleet during the day but then transfer over to all snow as we go through later on tonight.
So what do we expect for travel conditions? If you have to travel tomorrow, try to do it today. I'm sure some of the airlines are letting you do that without any sort of change fee. D.C. Metros, Philadelphia near blizzard conditions expected later on today and tonight Atlanta low clouds and wind after the rain this morning. And also some snow in Chicago.
Blizzard warning, we talked about the near blizzard conditions in some of these metropolitan airports. Well, blizzard warning off for southern Jersey and parts of Delaware, that means winds of 35 miles an hour, the visibility is dropping because of that blowing snow and big time waves. That will be as big of an issue as the snowfall which will be piling up and become well, as impressive as the last batch that came through.
Sixteen to twenty-four inches of snow expected in the D.C. area and maybe that much in Philadelphia, 12-18 is what we're going for now and rains in New York about 4-8 inches.
So Kiran and Christine, that is plenty of snow for your kids to do some sledding on, but I'm sure the little ones would like a little bit more on the way of a foot which is still a possibility. This is a pretty impressive storm.
ROMANS: Sledding and grilling, sledding and grilling in the snow.
CHETRY: All right, Rob Marciano, thank you.
ROMANS: Thanks Rob.
MARCIANO: You got it.
ROMANS: Also, Super Bowl menu -- rivalry rather on the menu. We're going to take you to an Indiana restaurant where the owners -- there they are, they are live right there for us. OK, he's from -- let me make sure I got this right -- he's from the Big Easy, but he supports the Colts, right?
CHETRY: That's right.
ROMANS: She's from Indianapolis, but she loves the Saints. And they've got the whole restaurant divided down the middle between Colts and Saints fans. And look its, wow, you know, I mean its breakfast time in Indiana and they are already having a party.
So we're going to take you there live and talk to them about their - their rivalry on the menu.
CHETRY: I think there's so many Saints fans in Indiana oh God, there you go.
ROMANS: That is awesome, they were awesome all right. So we'll be there in just a minute.
(COMMERCIAL BREAK)
CHETRY: There are a lot of stories right? About people that get along in their households when it comes to everything, politics, finances, just not sports.
ROMANS: Right.
CHETRY: Family loyalties you know, but never ever quite like this one. We're going to introduce you to a guy, who's a chef from New Orleans but a Colt's fan at heart.
ROMANS: And she is a diehard Saints fan from Indie. It's gotten so bad the couple has divided their restaurant war of the roses tale right down middle. And Deb and Carter Hutchinson are with us now and sitting next to each other, very peacefully, live from Worthville (ph), Indiana, with all of their customers behind them.
Good morning, everybody.
CARTER HUTCHINSON, COLTS FAN: Good morning.
DEB HUTCHINSON, SAINTS FAN: Good morning.
CHETRY: All right, so tell us a little bit about this rivalry? I mean, is this a friendly rivalry, do you take it really, really seriously when it comes to who you're rooting for?
C. HUTCHINSON: Well, I'm for the Colts. The Colts are going to win. I don't know why Deb is for the Saints.
D. HUTCHINSON: I love my Saints. I love my Saints. We take it pretty seriously, especially this time of year.
ROMANS: How did you guys switch teams? I mean, I would think that she would be for the Colts and you'd be for the Saints but you seem to adapt each other's hometown favorite -- how did that happen?
D. HUTCHINSON: I've never heard it called switching teams. I don't know, I fell in love with New Orleans. I met him in '96 at Mardi Gras. He said he has my heart and the Saints go right along with that. Him and the Colts, I don't get it.
CHETRY: Carter, in your defense, as we know Colts quarterback Peyton Manning, he's is from New Orleans, so there you go, right?
D. HUTCHINSON: Yes, he is. Look, I was born in New Orleans. I've lived there almost all my life, and the Saints have always been, to me, sort of a disappointment. So I finally moved up to Indiana with the winning team now, with the winning team.
ROMANS: I guess you are both with two winning teams. How do you handle the rivalry, because Deb you look like you want to give him a swift kick there? How do you handle the rivalry and still stay peacefully together? D. HUTCHINSON: Dude, they have TVs on the ridge. Where he is from in New Orleans, I'm telling you, his family is not getting this.
C. HUTCHINSON: They are not happy. They are not happy.
D. HUTCHINSON: But I know how we handle it.
C. HUTCHINSON: That's all right.
I do have something for my wife, though. She doesn't know this but since she is a Saints fan now, I made her, her own official Saints bag. That's for you, baby, you put that on. You put that on.
CHETRY: So you guys have sort of drawn the battle line, if you will, not only in your marriage when it comes to sports, but your restaurant as well. Tell us a little bit about what is going on behind you? How you guys are doing. Your restaurant Zydeco's it's a New Orleans theme. How are you splitting your customers based on who they are rooting for?
C. HUTCHINSON: Well, we put all the Saints fans back by the dumpster where they are more comfortable.
D. HUTCHINSON: Dude, you did not.
There are a lot of people from Louisiana that live in Indiana.
C. HUTCHINSON: We love them. We love them.
D. HUTCHINSON: And they come in here and they love the Saints, and I love the Saints, we have a lot of colts fans, too, don't know where they are coming from, but it's been a rivalry. The Colts fans have been giving me a little grief this last few months. I called this Super Bowl back in August, and I decorated my windows, decorated -- I knew this was going to happen.
And I have endured quite a bit of grief. And actually to sit here on national television and get more from you?
CHETRY: Carter you're in charge of the menu...
D. HUTCHINSON: I'm just saying.
CHETRY: What are you going to feed these ravenous football fans of either persuasion this weekend?
C. HUTCHINSON: We are going to have a great menu. Gumbo, jambalaya, we're going to have wings for people who want wings. We're going to have (INAUDIBLE) casserole; it's going to be awesome.
C. HUTCHINSON: For the Indians and corn. He's making corn. Lots of corn.
D. HUTCHINSON: Lots of corn.
ROMANS: What about the other Super Bowl tradition. Of course what beer is going to be flowing there? Is it different based on what team you're rooting for?
C. HUTCHINSON: There might be a little beer; a little bit.
D. HUTCHINSON: It's Sunday, you know, probably not as much beer, more hurricanes.
CHETRY: You're going for the hard stuff as you watch the game. You two are hilarious. I see a reality show in your future. You guys are adorable.
D. HUTCHINSON: Well he -- in the tradition, who is the guy?
C. HUTCHINSON: Debby and I made a bet, when the Colts win, she has to go out back and clean out the grease pit. If she wins -- she won't -- but if the Saints win I have to put on a dress and walk-up and down Main Street with a big sign, "Saints Number One" but that's not going to happen.
ROMANS: Now I am rooting for the Saints.
C. HUTCHINSON: No, no, no.
CHETRY: We're going to keep the cameras there.
D. HUTCHINSON: He actually made a sign for me that I love Peyton Manning so I have to carry that if they win.
CHETRY: Look, I hope you all have a really great time. Hope you have a great breakfast this morning. I hope you have a fantastic run up until the actual game. And a lot of fun is had by both sides, no matter who wins, until we finally have a kick off.
Deb Hutchinson thanks so much. Carter Hutchinson thanks. Zydeco's, Morrisville, Indiana.
D. HUTCHINSON: Thank you guys.
C. HUTCHINSON: Thank you.
CHETRY: All right. Thanks everybody. It's 58 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Thanks for being with us on this American Morning. Great to have you with us, too, Christine for the past couple of days.
ROMANS: Nice to be here.
CHETRY: We'll all be back on Monday.
Here's "CNN NEWSROOM" with Kyra Phillips -- Kyra.
KYRA PHILLIPS, CNN ANCHOR, "CNN NEWSROOM": Thanks so much guys.
