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EARLY START

PM Minnis: "It is Scary -- We Are Definitely in Dire Straits"; Dorian Targets the Southeast; Walmart Takes Action on Guns; Families Heartbroken After Boat Tragedy; U.S. Manufacturing Contracts for First Time in 3 Years. Aired 5-5:30a ET

Aired September 4, 2019 - 05:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: A key manufacturing report in the U.S. renewed concerns that the president's trade war is hurting the very part of the economy it was designed to help.

[05:00:06]

Watch this space. Talk of a recession in manufacturing.

All right. Stepping up to help in the Bahamas in the aftermath of Hurricane Dorian, Royal Caribbean and the Walt Disney Company will donate $1 million to disaster relief efforts. Chef Jose Andres and his team are on the ground in Abaco delivering sandwiches to the Bahamas.

Verizon granting its customers unlimited texts and calls from the U.S. to the Bahamas until next Monday. And customers in Dorian's path in Florida, Georgia, North Carolina, Verizon customers will also have unlimited calling, texting, and data.

DAVE BRIGGS, CNN ANCHOR: Thanks to our international viewers for watching. Have a great rest of your day.

For our U.S. viewers, EARLY START continues right now.

(MUSIC)

(BEGIN VIDEO CLIP)

HUBERT MINNIS, PRIME MINISTER OF BAHAMAS (via telephone): We have been attacked by a vicious, devastating storm.

(END VIDEO CLIP)

BRIGGS: Unspeakable devastation in the Bahamas. Entire towns flattened by Hurricane Dorian. The storm now stuck in the Florida coast with possible landfall in the Carolinas. A brand-new storm track just in from the National Hurricane Center.

ROMANS: Walmart takes action on guns and wants lawmakers to do the same. What the retailer is changing, what it's telling its customers in the wake of the El Paso massacre.

(BEGIN VIDEO CLIP)

CHERIE MCDONOUGH, MOTHER OF CALIFORNIA BOAT FIRE VICTIM: She was just following her dreams. She loved it here and she loved the boat.

(END VIDEO CLIP)

BRIGGS: Grieving families looking for answers this morning. Thirty- four people now presumed dead from the floating inferno off the California coast.

Good morning, everyone. Welcome to EARLY START. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. Good to see you this morning. It is Wednesday, September 4th. It is 5:01 a.m. in the East.

Let's begin with the Bahamas obliterated by Hurricane Dorian, the scope of the devastation finally coming to view. Thousands of homes flattened. Entire communities eviscerated. The official death toll stands at seven this morning. And that number expected to climb.

BRIGGS: On Grand Bahama, an estimated 75 percent of homes are under water, recovering from this unprecedented storm will cost billions. Take a look at what used to be the runway at Freeport International Airport totally submerged.

There's the prime minister of the Bahamas describing the enormity of the destruction.

(BEGIN VIDEO CLIP)

MINNIS (via telephone): We have been attacked by a vicious, devastating storm, an enemy that we would have had very little defense against such an enemy. And it's caused severe damage to two of our major islands that is Abaco and Grand Bahama.

(END VIDEO CLIP)

ROMANS: From overhead the scenes sobering. The photographer who captured these images describes what used to be a vibrant community on the Abaco Islands.

(BEGIN VIDEO CLIP)

BRANDON CLEMENT, STORM CHASER, LIVE STORMS MEDIA (via telephone): It's a lot of homes. You can't tell any homes there. It just looked like a bunch of building materials put on a big grinder and just thrown around the ground. It's just completely gone.

(END VIDEO CLIP)

BRIGGS: Throughout the Bahamas, locals are navigating waist-high water, some with their pets in search of dry land.

Howard Armstrong was rescued from the deadly storm surge. His wife did not make it.

(BEGIN VIDEO CLIP)

HOWARD ARMSTRONG, LOST HIS WIFE AND STORM IN HURRICANE DORIAN: It came over the roof, I would imagine 21 feet at least. We were doing alright until the water kept coming up and all the appliances were going around the house like a washing machine. That's probably -- I got hit with something in there.

And my poor little wife got hypothermia, and she was standing on top of the kitchen cabinets until they disintegrated. Then I kept with her and then she just drowned on me.

REPORTER: What was the last thing your wife said to you?

ARMSTRONG: I'm not going to -- I think I'm going to die. And I said, "No, you're not" and that was it. She took a little mouthful of water and that was it.

(END VIDEO CLIP)

BRIGGS: Take a look at these before and after satellite images, before the storm on the left, after on the right.

So much of the Bahamas now covered by water, leaving tens of thousands of people struggling to survive.

Patrick Oppmann there with more.

(BEGIN VIDEOTAPE)

PATRICK OPPMANN, CNN CORRESPONDENT: Dave and Christine, finally, after days of being battered by Hurricane Dorian, we were able to get out and see other parts of the island. Much of this island is still off-limits there. There are flooded roads. There are roads that are blocked by submerged cars.

But we did get to one area where rescue missions are underway by volunteer civilians -- people who are just going out in their own personal boats, their own jet skis, and trying to rescue their neighbors and their friends, and even strangers -- people they've never even met.

[05:05:04]

It was pretty harrowing because hurricane conditions are still battering much of this island. Several boats and jet skis did flip during these rescue attempts. Other times, they said, the water just was too shallow as the tide rose and fell with the hurricane to get the houses.

But we saw dozens of people rescued. They were in awful shape. They spent days now without food or water.

Some of them hanging onto their roofs, some of them swimming in the water, some of them having seen their relatives carried off by the storm surge. We are hopeful, though, by the sight of a Coast Guard helicopter that flew over this island late last night. Hopefully, this morning, more rescues will begin. We've been told by some of these volunteer rescuers that they're working around the clock until everybody is safe and sound -- Dave, Christine.

(END VIDEOTAPE)

BRIGGS: Patrick Oppmann, great reporting there.

For more on how you can support nonprofits working to help Hurricane Dorian victims, please go to CNN.com/impact.

Hurricane Dorian finally moving north, lashing Florida's east coast. It could make landfall in the Carolinas later this week. A new update just in from the National Hurricane Center. Let's get that for you from Chad Myers this morning.

Chad, good morning.

CHAD MYERS, AMS METEOROLOGIST: Hey, good morning, Dave.

You know, still 105 miles per hour, still offshore by about 80 to 100 miles depending on what part of the eye you're looking at. But on- shore winds right now, Daytona, New Smyrna, all the way up into the Crescent Beach area, we are going to see the continued pounding of the rain here, all the way up toward Cinnamon Beach, very heavy rainfall.

Every time a band comes by, the winds are going to pick up to almost hurricane strength today. This is not as close as the storm will get, though, later on this week, because as it goes to the Northwest right now and tries to turn to the Northeast, eventually land will get in the way. And that land is South Carolina and North Carolina, right there, very close.

Even if it doesn't make official landfall, where the center of the eye hits land, the eye wall will hit land. And the eyewall could have 100 miles per hour winds certainly as it goes on by. And here's Friday 2:00 in the morning, just after midnight, finally about 8:00 or almost this time on Friday, 48 hours from now, the storm goes by Cape Hatteras and out to sea. And no more effect. It should not, does not look like it can turn back toward the Northeast part of the United States.

Here's what the radar should look like for the rest of the day. We're going to stop it here, right about 5:00 tomorrow morning. Very close to Savannah and Charleston, Charleston forecasting somewhere in the ballpark of a 10.5-foot surge -- not total surge, total level. And Hugo was 12.5. That tells you only a couple feet below where Hugo took the water into Charleston.

Hurricane warnings up into Wilmington right now and that's going to continue for the rest of the day. The eye doesn't look that impressive right now on the satellite, but it still has a pretty circular eye. We'll keep you up to date. Planes are flying back and forth through it. The pressure still 964,

which still indicates a category two to almost three hurricane out there. It is not dying. We are now in the Gulf Stream. We are in the warm water of the Atlantic. And that could keep it going for many, many hours to come -- Christine.

ROMANS: And that is a really important point, Chad. Thank you so much.

All right. More than 7,100 customers in Florida are without power this morning. The majority in Brevard and Indian River counties.

Let's get more on the current conditions in Florida. We have folks up and down the coast and in our weather center.

Let against go right now to Jensen Beach, live there, and bringing in CNN meteorologist Derek Van Dam.

Hey, Derek.

DEREK VAN DAM, AMS METEOROLOGIST: Yes, good morning, Christine.

Since we've been here overnight, we have had driving rain, tropical storm-force winds, and a surging intercoastal waterway and Atlantic Ocean about half a mile behind me. But, of course, nothing, this is a far cry from what they've endured the past two days, just 80 miles to my east in the northern Bahamas.

We are in Martin County. Now, the evacuation orders here have essentially been lift, as well as the St. Lucie County evacuation orders. We talked to some of the officials at the Martin County sheriff center, and they were explaining to us that there hasn't been any significant damage reported across the county. Good news, as well, minimal power outages here.

But this is a huge sigh of relief here because if you think about the residents, four days ago, they were staring down a category-five monster headed directly toward the east coast of Florida. They were hoping, praying for the Northeast shift. They got it. That means the storm is going to continue to ride the coastline of Florida, sparing the state from the worst of Hurricane Dorian.

But now, we focus all eyes on the Carolinas and into Georgia for the coming hours. Back to you, Christine.

ROMANS: All right. Thank you so much for that, Derek. And stay safe this morning.

BRIGGS: President Trump has approved emergency declarations for both north and South Carolina. And new evacuation orders have been issued for residents of both states.

[05:10:04]

Crews from Oklahoma Gas and Electric already on their way to North Carolina to help out. They've gathered here to say a prayer before leaving.

ROMANS: So, Charleston international airport in South Carolina will close at 3:00 p.m. today. Officials telling everyone in the evacuation zones they must leave now. Both lanes of I-26 in South Carolina have been one way out of town to assist with evacuations. At noon today, that ends so emergency crews can come in and seek shelter at safe locations.

Some mandatory evacuation orders have been lifted in parts of Florida that were spared by Dorian. There are more than 160 shelters now open across the state.

BRIGGS: Just reiterating what Chad Myers said, the eye wall will hit land. So, listen to these warnings.

Ahead, big business news, manufacturing in the United States down for the first time in three years, all because of the president's trade war. What it means for the economy, next.

(COMMERCIAL BREAK)

[05:15:34]

ROMANS: All right. Good morning. Fifteen minutes past the hour.

An alarming signal that the trade war has a lasting bite. America's manufacturing powerhouse stumbled. An important report on factory activity contracting for the first time in three years, the very sector the president sought to favor with his tariffs and tough talk is shrinking because of the higher costs of those tariffs in retaliation and slowing global growth.

CNN's Cristina Alesci is here.

The signal I think for manufacturing here and from this data yesterday is pretty significant.

CRISTINA ALESCI, CNN BUSINESS & POLITICS CORRESPONDENT: Yes. Donald Trump has a real problem because as you noted, this is the one area of the economy that he was really touting as helping as he would help. Instead, his trade war is definitely hurting based on the data that we got yesterday.

Now the headline number is interesting because it was the first time of contraction in three years. But if you allow me to geek out for a second --

ROMANS: Please. By all means.

ALESCI: There are five components to the headline number. Four of those components, and that's everything from new orders to production to employment, contracted to various degrees record lows. That means that this is a broad-based signal of a recession headed.

And for me, this data is even more important than the jobs number that we're going to get on Friday because it's what's considered a leading indicator.

ROMANS: Absolutely.

ALESCI: It tells you what's going to happen as opposed to the jobs data that looks backward as what's already happened.

Also, most economists that I spoke to said, look, manufacturing is technically all part of the U.S. economy. But this pullback in manufacturing hiring could spread to other parts of the economy and ultimately impact the backbone of the U.S. economy which is the U.S. consumer.

BRIGGS: It could impact the presidency. Now this will certainly ramp up the battle between the Fed and the administration, looking for a cut in the next couple of weeks. And this will likely ramp up the battle between the administration and the "Wall Street Journal," writing, quote: Reordering global supply chains built over a generation turns out to have far greater economic costs than the Trump trade warriors imagined. The political costs may follow.

Have we seen evidence of those political costs?

ALESCI: I think we're starting to see some evidence. It's hard to quantify it. But a group of American manufacturers said yesterday they put out a statement after the data came out that said it's clear Trump's tactics are, quote/unquote, falling apart. I mean, they just said it outright like that.

ROMANS: Right.

ALESCI: Last week, a Quinnipiac poll came out and showed for the first time in Trump's presidency, more people are concerned about the economy that happen they are optimistic.

BRIGGS: He was under water three points.

ALESCI: Absolutely. That was a big deal.

The question is, what does he do from here?

ROMANS: Right.

ALESCI: Yes, he could -- you know, flirt with the idea of a tax cut which I've been talking about for months and months. He could strike a deal with China.

But let's not forget that when you -- and, Christine, you talk to CEOs all the time. When you talk to them, they say the damage has been done.

ROMANS: Yes.

ALESCI: The supply chains unraveled. The trust between --

BRIGGS: Broken, un-reparable? ALESCI: Potentially. I mean, there's real damage that's been done.

He could give a jolt to the stock market. Trump can deliver that by doing a tax cut, by announcing a deal with China. But the very fabric of the relationship between the U.S. and China has been changed structurally.

ROMANS: I know, I'm less optimistic that he can get a deal done in the near term. Here's why -- when you look at the Twitter feed and talk to people around him, they're saying they want to wait for a Democrat. We're not going to have a Democrat come into office. He's saying we're not going to have a trade deal.

We talked to the trade warriors who have the president's ear as well. They point out numbers like this -- that since the start of the trade war, since June 2018, when the USTR announced the tax, the stock market is up. Not up the 50 percent the president says it is since his election, but the market is up.

You hear from people like Peter Navarro who says, look, this is the perfect time to do this because the U.S. economy is so strong, the American consumer is so strong. That's going to be their defense.

ALESCI: Totally. To be honest, if you look at the way China polls with voters, it's almost more popular to beat up on China than it is to build a wall in Mexico.

ROMANS: Sure.

ALESCI: So, politically, they know that this is a very important issue. The question is, how much can they gamble with this until it really starts to bite? And to your point, I think they're getting to the point where they can no longer gamble. They need to do a deal before the election.

[05:20:01]

ROMANS: Right.

ALESCI: And in honesty, the Chinese also need to do a deal because it's hurting their economy.

One thing is clear, though -- even if we get positive job numbers on Friday, even if the president continues to push the Fed, recession fears despite the stock market being up are here to stay.

ROMANS: Right.

ALESCI: We've seen this in the bond market, signaling fears of recession. Now we see it in manufacturing data. This conversation is not going away despite the president's best efforts to steer us otherwise.

BRIGGS: Not going away, Xi Jinping. He doesn't have to worry about elections.

ALESCI: Exactly. ROMANS: Right.

BRIGGS: So, different calculation on their end.

ROMANS: Multiyear lows yesterday in the ten-year bond.

ALESCI: Yes, exactly.

ROMANS: All right. Cristina Alesci, nice to see you this morning. Thanks.

ALESCI: Thanks for having me.

BRIGGS: All right. Ahead, a critical swing state will have to redraw voting maps and fast, which state's gerrymandered lines were ruled unconstitutional.

(COMMERCIAL BREAK)

[05:25:47]

ROMANS: All right. A big move from Walmart. Walmart ending all handgun ammunition sales. The nation's largest retailer says to its customers, do not bring your guns to our stores. Even in states that allow open carry, this a month after a massacre at an El Paso Walmart killed 22 people.

Walmart is also asking lawmakers to do their part. CEO Doug McMillon sending a letter to Congress that reads: There are multiple bills before the House and Senate that address the issue of gun safety and are worth examining.

McMillon specifically cites stronger background checks and reauthorizing an assault weapons ban. But Senate Majority Leader Mitch McConnell clearly not motivated.

BRIGGS: The search for victims of a deadly dive boat fire off the California coast have been suspended. Thirty-three passengers and one crew member are now presumed dead. We have new video of the U.S. Coast Guard responding to the Labor Day disaster.

The coast guard spent 23 hours searching 160 square miles for victims. We're also learning more about the victims this morning, including a family of five from Stockton, California, and a 25-year-old woman from Cincinnati whose mother is devastated.

(BEGIN VIDEO CLIP)

CHERIE MCDONOUGH, MOTHER OF CALIFORNIA BOAT FIRE VICTIM: She was just following her dream. She loved it here and she loved the boat -- she loved diving. And she would just do -- could do anything she wanted.

(END VIDEO CLIP)

BRIGGS: Of the 39 people aboard, only four crew members and a captain were found alive.

ROMANS: All right. North Carolina's legislative maps are unconstitutional. A three-judge panel ruling the state's congressional districts violate the North Carolina Constitution through extreme partisan gerrymandering. The court is leaving it up to the Republican state legislature to redraw those maps with specific guidelines. They must be redrawn by September 18th, and lawmakers cannot use data to try to draw a partisan advantage.

In the midterms, Republicans received less than half of the vote, but the GOP still controls more than half of the state legislature, and the vast majority of congressional seats.

All right. Years of recovery ahead for the Bahamas. Some areas this morning unrecognizable after Hurricane Dorian parked over the island for a full day. The storm now dangerously close to the Southeast, stalking up the Florida coast. Potential landfall in the Carolinas.

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