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Early Start with John Berman and Zoraida Sambolin

Huge Expansion in Takata Airbag Recall; Iraq Cabinet Calls For Shiite Militia; Parking Lot Incident Sparked Biker Bloodbath; UBS Slapped with $545 Million In Fines; Could College Soon Be Free? Aired 5:30-6a ET

Aired May 20, 2015 - 05:30   ET

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

JOHN BERMAN, CNN ANCHOR: The largest auto recall ever. Takata recalling nearly 34 million vehicles for a faulty air bag linked to five deaths, and more than 100 injuries. We're going to tell you what you need to know. And how to find out if your car is involved.

CHRISTINE ROMANS, CNN ANCHOR: Terror gaining ground in Iraq. Is it time for the U.S. to change its strategy in the war on ISIS? We're live.

BERMAN: And new information on what might have caused a deadly biker brawl in Texas, as police warn about future attacks. We have the latest ahead.

[05:30:03] Welcome back to EARLY START, everyone. I'm John Berman.

ROMANS: I'm Christine Romans. It's 30 minutes past the hour. It's nice to see you all this Wednesday morning.

Developing this morning, a huge recall of Takata air bags, a recall that's nearly doubled in size. The Japanese auto parts giant recalling air bags in 34 million vehicles, nearly one in every seven cars in the U.S. for the first time after tons of pressure from carmakers and government, Takata is admitting its air bags are bad.

This is the most biggest and most complex consumer product recall in U.S. history costing billions of dollars. This will take years to complete. At least five deaths and dozens of injuries are tied to the faulty air bags, which can fire shrapnel into drivers' faces as they deploy.

Now the recall affects dozens of different makes and models including BMWs, Fords, Toyotas, although the majority are made by Honda. CNN's Will Ripley is standing by live for us in Tokyo with the latest.

Will, this is a huge, huge admission from a company that really dominates the air bag business, that so many of its air bags are faulty. Let's be clear here, police who are investigating some of these accidents said they thought that the victims had been stabbed not in a car accident, because those air bags exploded with such force.

WILL RIPLEY, CNN CORRESPONDENT: The details of some of these minor accidents that turned either very severe as far as the injuries or deadly in some cases, it is just horrifying to think of, Christine. Because for many drivers, you, me, when you hear that your vehicle is equipped with air bags, you assume that is a safety feature that will save your life in a crash.

Not take your life, as is the case now, with at least five deaths in the United States including a father who was hit by shrapnel from an exploding air bag and bled to death in front of his 17-year-old son.

So, yes, the fact that Takata, headquartered here in Tokyo, a major air bag manufacturer with its products in tens of millions of cars around the world, the fact that this company is taking financial responsibility, legal responsibility, saying that, yes, their air bags are defective, it gives you a sense of the true scope of this problem.

One in seven vehicles in the United States potentially affected. They still don't know exactly what triggers this defect that causes the air bags to explode, to shoot shrapnel at people effectively giving the effect of an explosive device.

What drivers can do is put their vin number in a tool that the NHTSA has posted online, just type in your car's vin and then you'll know if your vehicle is affected by this recall or even others that go back 15 years, Christine.

Very important for drivers to do that so that they can have some peace of mind and if their car is affected, they can contact their dealer and take steps to get it fix.

ROMANS: But who knows if their dealer is going to have the repair kit to fix it at this point. I mean, there are people asking if they should disable their air bags. I think some people have so many questions. You think going to the dealer is the first place to go?

RIPLEY: Definitely call your dealer because you're right. The experts there can answer your questions, especially if you put in your vin number, and it does turn out that your car has potentially defective Takata air bag.

People don't know what they are supposed to do. It's a scary situation and the company is going to really struggle to meet the demands now in the coming months and years. There are going to be so many orders and just not enough capacity to produce all these replacement air bags.

That's why Honda, one of the major manufacturers also based here in Japan, they're looking alternate suppliers to try and get safer air bags in their cars.

ROMANS: All right, Will Ripley, thanks so much for that in Tokyo for us this morning.

BERMAN: Happening now in Iraq, ISIS is launching new small-scale attacks in the city of Khalidiya, just east of Ramadi, fell into ISIS's hands, Ramadi did over the weekend. The Iraqi government now sending in Shiite militia fighters into Anbar Province, at the same time they're promising to arm Sunni tribesmen. The local officials who were in Ramadi as it was falling say the Shiite-dominated central government has failed to keep promises to send enough support and weapons.

Our senior international correspondent, Arwa Damon, following the latest developments for us. Good morning, Arwa.

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning. And that called for assistance, military assistance, when it comes to trying to prevent the fall of Ramadi, began as far back as November, John, if not before. Those were trying to defend Ramadi when it comes to Iraqi Security Forces.

They really did do their best, they say. They put up a fight, but at the end of the day, they could not push back the relentless attacks by ISIS. That came in the form of indirect artillery fire and then escalated to relentless suicide bombings.

And eventually that massive force of ISIS that was able to sweep through the city, forcing out all of the Iraqi Security Forces. Now, the Iraqi government is trying to beef up out presence of its own fighting forces in an area at a military base there.

[05:35:08] And they're also as you're mentioning sending in more of these paramilitary Shia units. As well as saying that they are going to try to escalate their attempts to arm the Sunni tribes, all of which, of course, further complicates what is already a complicated landscape.

Because this fighting force at the end of the day is not necessarily cohesive. It does not necessarily fall under a single demand structure. What it's also doing, John, at this stage is forcing the Iraqi government and all of the fighters at its disposal truly focused on preventing ISIS from pushing forward towards Baghdad.

And the U.S. for its part, also trying to perhaps revise its strategy, so far even is being called at this stage a strategy. We've even seen on the part of U.S. led coalition, the airstrikes and as we've not seen sufficient enough when it comes to preventing ISIS from taking over Ramadi.

The U.S. also attempting to try to retrain, reequip to a certain degree and restructure the Iraqi Army. But this is an exercise that could take years, to try to put together a force that is capable of driving back an entity like ISIS as well.

And then let's talk about the humanitarian crisis that has unfolded, tens of thousands fleeing the recent violence in Ramadi. Even those that do manage to escape the city do not necessarily find themselves in safe locations.

A lot of the towns that they're fleeing to come under frequent ISIS attacks as well. There is not a single front line in Anbar Province. There are multiple front lines, multiple cities, that are coming under consistent attacks. The U.N. has been calling for additional financial support to try to deal with the escalating humanitarian crisis, but no matter how you look at the situation right now, whether it's militarily speaking or whether it's on humanitarian terms.

The bottom line is the Iraqi government and the U.S. have to really get their acts together not just saying they're going to do things, but actually carrying out decisive action on the ground -- John.

BERMAN: It's clear neither government, the Iraqi nor the U.S. government currently has control of the situation, at least as much control as they would like. Arwa Damon for us in Jordan. Thanks very much.

ROMANS: When you're talking about Ramadi, you're talking about, you know, American forces have been in Ramadi in recent years, lives, American lives --

BERMAN: More than 1,000 have been killed in Anbar Province since 2003.

ROMANS: All right, Hillary Clinton now addressing the questions about her e-mails during her tenure as secretary of state. She used a private e-mail account to conduct government business. At a campaign stop in Iowa, she urged a speedy release of the records.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I have said repeatedly I want those e-mails out. Nobody has a bigger interest in getting them released than I do. I respect the State Department. They have their process that they do for everybody, not just for me. But anything that they might do to expedite that process, I heartily support.

(END VIDEO CLIP)

ROMANS: The Clinton comments come after a federal judge rejected a State Department proposal to release 55,000 pages of Clinton e-mails by next January. The judge said the department should consider releasing the e-mails in batches.

Also this morning, "Wall Street Journal" reporting when Clinton was secretary of state her staff scrutinized and sometimes blocked the release of politically sensitive documents that were legally requested as public records.

BERMAN: Wisconsin Governor Scott Walker probably will announce officially his presidential plans at the end of June. He was campaigning on Capitol Hill yesterday courting House Republicans. He was asking a group of Republican lawmakers to imagine what they could do with majorities in Congress and also what he considers to be a bold conservative in the White House, among obviously he believes, like him. Walker will probably announce his plans officially after he finishes the Wisconsin state budget next month.

ROMANS: All right, time for an EARLY START on your money. Stocks have never been this high. It took only 13 points of a rally yesterday for the Dow to notch a record-high close, really big moves in some of those big stocks that so many of you have, Netflix and Apple.

Four cancer charities called out shams. The Federal Trade Commission is naming the Cancer Fund of America, cancer Support Services, Children's Cancer Fund of America and the Breast Cancer Society. These charities are run by members of the same extended family.

The government says they conned donors out of $187 million in 2008 to 2012. They're accused of spending 97 percent of your donations on private fundraisers or on themselves. That includes gym memberships, dating websites, luxury cruises, concert tickets, cruises.

Only 3 percent went to actual cancer patients. Both the Breast Cancer Society and the Children's Cancer Fund of America are being dissolved.

BERMAN: New information this morning on what might have triggered the deadly biker fight in Texas. Investigators continue to comb through that crime scene. We'll report next.

(COMMERCIAL BREAK)

ROMANS: A bloody shoot-out between rival biker gangs in Waco, Texas, may have been triggered by a pretty minor parking lot incident. Nine people were killed, 18 others were wounded in this chaos. Police say a biker may have had his foot run over in the parking lot right before the bullets started flying.

Investigators have already recovered dozens of weapons. They're still processing the crime scene. Let's get more this morning from CNN's Kyung Lah in Waco.

KYUNG LAH, CNN CORRESPONDENT: Good morning, John and Christine, investigators have continued to go car to car, and what they are pulling out are even more weapons. We saw them pulling out long rifles, handguns even a bulletproof vest.

This is adding to a cache of weapons they've already recovered here at the scene, 100 weapons, they say, that number now continuing to climb. Meanwhile, a manhunt today ended up in a peaceful resolution.

There were three suspects, according to the sheriff's department that were released on a lower bond. Their bond was set at $50,000 because they weren't arrested right here in this parking lot.

They were arrested just outside the perimeter, but when the police figured out that he had a lower bond, their bond was revoked. There was a brief manhunt and then those three suspects were brought in. Their bond now set at $1 million, just like the other 170 suspects.

And we're also learning more details from the police about how all of this began. They had mentioned that this started over a parking spot. Well, it may turn out that one of the bikers had his foot run over. That it could have started from something that simple. [05:45:08] Nine people killed, according to a preliminary autopsy report. All of them killed with gunshot wounds. They were between the ages of 27 and 65 -- John, Christine.

ROMANS: All right, Kyung, thanks for that.

BERMAN: You know what I want to know, what's coming up on "NEW DAY"? Alisyn Camerota joins us.

ALISYN CAMEROTA, CNN ANCHOR, "NEW DAY": I have that answer for you, guys, coincidentally. So of course, we will have more on the biggest auto recall in history, 34 million cars affected. Is your car one of them? So we'll tell you how to figure that out.

Also is the strategy to fight ISIS failing? After the fall of Ramadi, that's the question and our terror experts are here to explain what they say needs to happen now so all of that when Michaela, Chris and I see you at the top of the hour, guys.

ROMANS: Thanks, Alisyn.

BERMAN: We have new arrests in an elaborate London jewel heist. Hundreds of millions of dollars' worth of goods stolen, but it is who police arrested. And, frankly, how old they are that might surprise you. We're live with details.

ROMANS: Experience, not age, Berman, their experience.

(COMMERCIAL BREAK)

ROMANS: New this morning, more threatening rhetoric from North Korea. North Korea says it has nuclear weapons in reach. Pyongyang's National Defense Commission warns it has the capability of miniaturizing nuclear warheads, a key step to fitting them on missiles.

[05:50:05] North Korea warning other countries, don't challenge us. Recent assessments from the Pentagon have suggested Pyongyang does indeed have the capability to shoot, to fire a nuclear-tipped missile.

BERMAN: A showdown in the coast of Yemen right now. The Pentagon says an Iranian cargo ship flanked by two Iranian warships is heading toward a Yemeni port. Iran says the vessel is carrying humanitarian aid. Saudi Arabia and other Middle Eastern nations accused the Iranians of supplying weapons to the Houthi rebels in Yemen. The Iranians say they will not allow the Saudis or anyone else to inspect this ship.

ROMANS: More than 400 migrants reportedly stranded at sea for months, rescued by a flotilla of fishing boats and taken safely to shore in Indonesia. They are the latest victims of this humanitarian crisis in Southeast Asia. The rescue coming after the Indonesian foreign minister said the country had given, quote, "more than it should to help migrant stranded on boats by human smugglers."

BERMAN: Nine men ranging in age from 43 to 76 have been arrested in connection with a brazen Easter weekend heist in London. This thing was watched around the world, more than $300 million worth of goods taken from these safety deposit boxes. Scotland Yard says a number of large bags containing high-value property have now been recovered. More than 200 officers are helping out to arrest the suspects.

ROMANS: All right, could college soon be free? You heard me, free college. That's one presidential candidate's proposal, a new plan for America's education next.

(COMMERCIAL BREAK)

ROMANS: All right. Good morning, I'm Christine Romans. Let's get an EARLY START on your money this Wednesday morning.

[05:55:11] Another day, another record high, the Dow inch up just about 13 points yesterday. With stocks here, that was enough for a record-high close. The second record for the Dow in a row as stocks keep climbing, it's pretty good for your portfolio, Netflix, for example, 80 percent just this year. A lot of other big name stocks doing very well.

UBS paying more than $500 million in fines to the U.S. government for manipulating markets. UBS will plead guilty to fraud and pay a $203 million fine for influencing London's benchmark interest rates. The bank will also pay $342 million to the Federal Reserve related to its foreign exchange business.

The Justice Department is expected to announce similar agreements with Barclays, JPMorgan Chase, Citigroup, Royal Bank of Scotland.

All right, Senator Bernie Sanders has introduced a new bill to make college free. The College For All Act would eliminate undergraduate tuition at public colleges.

The Vermont independent is running for president as a Democrat. He says the idea will cost $70 billion per year. He says he would pay for it with a tax on Wall Street. The bill would increase interest rates on student loans by 2 percent.

Hillary Clinton is also focused on rising college costs in Iowa on Monday. She said we have to make college as debt-free as possible. They're pushing for debt-free college, a big populous push to help people pay for school.

You know, to go to college it costs as much as basically four brand- new cars. Most families can't afford to buy four brand-new cars. They can't afford to go to college all at once. It really resonates on the populous side.

BERMAN: Two things, one the president has actually proposed something with the community college funding for that, there's something in place in that direction. Not the $70 billion deal plan. I want to know if it's retroactive, back to, say, the early '90s. That's something that should be considered in a serious way.

ROMANS: That should be considered. We know that the Education Department at the behest of the White House is investigating or pursuing whether bankruptcy laws can be changed so student loan debt can be changed in bankruptcy laws. Right now, every single case of bankruptcy, personal bankruptcy, you emerge on the other end still with your student loans intact.

BERMAN: What's the average age of student loans to be done, well into the 30s?

ROMANS: You're supposed to pay it off in ten years, but most people don't.

The largest auto recall ever, 34 million vehicles carrying airbags that could be dangerous, "NEW DAY" starts right now.

(BEGIN VIDEOTAPE)

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": The largest auto recall in American history.

UNIDENTIFIED MALE: Thirty four million vehicles, almost a dozen car companies.

UNIDENTIFIED MALE: Takata has refused to acknowledge that their air bags are defective. That changes today.

UNIDENTIFIED MALE: Hope is not a strategy.

UNIDENTIFIED MALE: Are we going to light our hair on fire every time there's a setback in the campaign against ISIL?

UNIDENTIFIED MALE: I think setback's an understatement. The fall of Ramadi is a big deal.

CLINTON: I have said repeatedly I want those e-mails out.

BERMAN: Did Hillary Clinton's staff block the release of politically sensitive documents when she was secretary of state?

UNIDENTIFIED MALE: She can't run for president and not answer questions.

UNIDENTIFIED MALE: Is a war between biker gangs over or just beginning?

UNIDENTIFIED MALE: Violence usually condones more violence. Is this over? Most likely not.

(END VIDEOTAPE)

CHRIS CUOMO, CNN ANCHOR: Welcome to your NEW DAY. It's Wednesday, May 20th, 6:00 in the east. And the headline says it all, the largest auto recall in U.S. history, 34 million cars. This is recall of airbags by Japanese auto parts supplier, Takata, now doubling the previous recall of faulty bags. That means it affects one in seven vehicles on the road. CAMEROTA: So this morning drivers waking up wondering if their car is dangerous and if your car is recalled, how long will it take to get it fixed? Let's begin our coverage with CNN Tom Foreman live in Washington. What do we know, Tom?

TOM FOREMAN, CNN CORRESPONDENT: This really is an astonishing thing to imagine going on your commute today wondering if your car itself the safety system is going to do something terrible to you and if you are driving down the road with a truly lethal defect.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): This is what the trouble is all about, airbags exploding firing metal shards into passengers with so much force police say some victims look like they've been shot. That's allegedly what happened to Corey Burdick. His lawyer says when Burdic had a minor accident in Florida the airbag should have protected him.

RICH NEWSOME, ATTORNEY FOR COREY BURDICK: Instead the airbag exploded and sent a 3 1/2 inch piece of steel into his face taking out one of his eyes.

FOREMAN: Now federal authorities are saying enough launching a recall of 34 million cars nearly doubled the original number thought to be involved.

SECRETARY ANTHONY FOXX, U.S. DEPARTMENT OF TRANSPORTATION: Airbag inflaters we suspected did not work correctly and we believe that they have been responsible for at least five deaths in the United States.