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Obama Meets With Governors To Hear States' Financial Woes; Ford CEO Driving To D.C., In Hybrid Car, To Unveil Business Plans Before Congress

Aired December 02, 2008 - 14:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Hello, everyone, I'm Kyra Phillips live at the CNN World Headquarters in Atlanta. You're live in the CNN NEWSROOM.
Well let's have a look at issue #1 in a nutshell. When it comes to your money, it seems like every state is a red state. The nation's governors are meeting with President-elect Barack Obama. He is promising a fast financial plan to help the states with their money problems.

Today is also the deadline for the Big Three automakers to tell Congress exactly how they will spend any bailout money. Ford has already laid out its road to recovery; G.M. and Chrysler to follow. Ford's also reporting a bad November. Sales down more than 30 percent from last year. And there is more merger talk out there. British Airways reportedly in talks with Australian carrier Qantas.

Well, recession, you can say it out loud now, not whisper it. Economists confirming that we're in one, and have been for a year. OK, so is it the real deal? What now? Treasury Secretary Henry Paulson says it is about focus and flexibility.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: Until the financial crisis is behind us, we must remain vigilant, ready to respond to and to manage unpredictable events as they occur. Our first priority is on recovery. We work everyday fully aware of our awesome responsibility to the American people who depend on the financial system to save for college and retirement, for financing homes, cars and companies. I am confident we will work through the difficult period and opportunity and prosperity will again flourish.

(END VIDEO CLIP)

PHILLIPS: Paulson says that the government is looking to the more ways to tap into the $700 billion financial rescue program. It gets a first official review today from the Government Accountability Office.

As we mentioned President-elect Barack Obama is hearing today from the nation's governors. He is meeting face to face with them in Philadelphia. CNN White House Correspondent Suzanne Malveaux is there.

Hey, Suzanne? SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, hey, Kyra.

Well, Barack Obama, as well as the congressional Democrats are going to pass an economic stimulus package, a huge one, in January. That is what they have pledged, more than $500 billion. And there are some governors who are simply saying we want a piece of the pie, we want a piece of the action. So a lot of these governors behind closed doors, explaining to Obama what the financial crisis is in their own state. And saying, look, they want to create new jobs that they believe they can do through these projects, through building roads and bridges, and things like that.

Barack Obama listening to what they have the say. Now, it was interesting, he set the tone in the beginning of this meeting essentially reaching out to those who disagree with him, namely the Republicans.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D), PRESIDENT-ELECT: A special message I want to deliver to my Republican colleagues, who are here. I offer you the same hand of friendship, the same commitment to partnership as I do my Democratic colleagues. There is a time for campaigning, and there is a time for governing. One of the messages that Joe and I want to continually send is that we are not going to be hampered by ideology in trying to get this country back on track. We want to figure out what works.

GOV. SARAH PALIN (R), ALASKA: The campaign is over and I so appreciated this meeting we had. I am quite optimistic about moving forward in a bipartisan manner, as we do forge this partnership between states and the federal government. I appreciated that President-elect Obama recognizes first, that he recognizes how valuable it is to have governors in his Cabinet. And we assume all will go well and some of these governors will be in his Cabinet.

(END VIDEO CLIP)

MALVEAUX: So, Kyra, you heard from Sarah Palin. She is one of the governors that actually spoke out, saying that she didn't necessarily agree that all of this federal bailout money was a good idea. It was both her and Governor Arnold Schwarzenegger, of California, he said we have got to get our own financial house in order before we accept all of this money. Palin saying, look, this is more and more debt. So even among the group of governors, there was some disagreement in terms of how to get out of this financial crisis. But clearly, you did see at least an effort that was being made by Barack Obama and Sarah Palin to put the past behind them and to look forward, Kyra.

PHILLIPS: All right. Suzanne Malveaux, live from Philadelphia. Thank, Suzanne.

And today is the due date for the Big Three automakers to hand in their road map to recovery. It is a business plan with about $25 billion riding on it, the CEOs of all three will again be stating their case before Congress, later this week. Only they won't be taking corporate jets from Detroit to D.C. this time.

Ford was first up to spell out the plan. Ali Velshi, chief business correspondent, kick the tires on the plan for us, please.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, it is pretty good plan, but that is because of the three automakers Ford is in the relatively best position. Ford started the cutting earlier and sort of its transition into a different kind of automaker earlier than the other two did.

Let me tell you a little bit about what Ford is saying. They are saying that they hope not to not access any of the money from the $25 billion bailout, but if things were bad, they might need a $9 billion line of credit. They are expecting things not to be -- they have calculated their worst case scenario and hope that they are profitable by 2011. They are going to focus on small- and medium-sized cars, try and de-emphasize the trucks and SUVs that have been such a profitable part of the U.S. auto industry until, of course, people stopped buying them.

They will invest about $14 billion in more fuel-efficient cars and technologies for greater fuel efficiency. That has been a big selling point. Really, that is what most people want to hear. They will sell their five corporate jets and the CEO, like the CEOs of General Motors and Chrysler, the CEO of Ford has agreed to take a $1 salary if the bailout is approved.

PHILLIPS: What were we saying? That you couldn't even get a bag of Doritos out of the --

VELSHI: Wouldn't even get a bag of Doritos. .I don't know, I think if you are the CEO of Ford, maybe somebody just gives you Doritos.

(LAUGHTER)

PHILLIPS: How about GM and Chrysler ? Can you give me a little -- a few more details about the plan?

VELSHI: Well, General Motors is the one that is in the greatest difficulty. There has been a lot of people are talking, although, GM says it is no the case. And a lot of people think it is potential bankruptcy if GM doesn't get a bit of a bridge loan from government. General Motors is burning through money very quickly. The part of that is their own planning as a company.

The fact that they have been slow to switch over to more fuel- efficient, less expensive cars; part of that is because of this crisis is hitting people. People are laid off can't buy cars and people who are not laid off don't have the same access to money. So, GM is in the biggest problem.

Chrysler was a public company, it was then sold to Daimler, and that was a public company, too. Then it was sold back to an American hedge fund, a private equity fund, a couple of years ago. And it is not public, so we don't have access to Chrysler 's books. That will be a little bit more complicated for that company, because we just don't know what happens over at Chrysler. We know they make some good cars. We know that they are saddled with a lot of big trucks. We also know that the Jeep brand is probably one of the most valuable to them. So again, we are anxiously waiting for GM and Chrysler 's submissions, so we can go over them and see if they make sense.

PHILLIPS: And apparently they left behind the jets and some of them are making a road trip to the hearings, is that right?

VELSHI: That is right. Ford's CEO left Detroit this morning in a hybrid. Ford, on his way to Detroit (sic). We understand GM CEO is also driving in and we have -- I just heard from Chrysler that they haven't made a decision as to how they are getting their CEO there, but it will not be private jet. When you go from Detroit to Washington you don't actually have to make the decision until very soon before you go, because there are a lot of commercial flights. But I hope they don't get in one of those little jets, I don't even like those.

PHILLIPS: Someone just said a hot air balloon, no pun intended.

VELSHI: Yes. I mean at some point they need to make their decision quickly because the hearings are on Thursday. So, let's -- I'll let you know as soon as we find out.

PHILLIPS: First college road trip since college, right?

VELSHI: Yes, that's right.

PHILLIPS: Thanks, Ali.

Well, what works for Ford may not work for GM or Chrysler . The Big Three, remember? They are three different companies and coming up in just a few minutes we are going to talk with the auto critic for "The Detroit Free Press", about those differences. He will also tell us why he thinks Congress needs to act now.

We are following a live news conference right now, in Virginia. Kia Scherr, she is the wife and mother of those two Mumbai victims. Her husband, Alan, and 13-year-old daughter, Naomi, were killed during those attacks. They were on a spiritual retreat. Let's listen in.

(JOINED IN PROGRESS)

QUESTION: (OFF MIC)

KIA SCHERR, WIFE/MOTHER OF MUMBAI VICTIMS: We must send them our love and forgiveness and compassion, the most. As Jesus Christ said long ago, they know not what they do. They are in ignorance and they are completely shrouded and clouded by fear. We must show that love is possible, and love overpowers fear. So that is my choice.

QUESTION: Master Charles, could you speak about what we were talking about just prior to the events of the terrorist attack, did you know, were there any rumors or hear anything happening in the city?

CHARLES CANNON, FOUNDER, SYNCHRONICITY FOUNDATION: We were presenting programs each evening in Mumbai, to the public, and to which our group participated in those programs every evening from 6:30 to 8:30. And we returned to the hotel, thereafter, and had dinner. I took my dinner in my room, and many of the people in the group took their dinner in the restaurant of the -- the main restaurant of the hotel, which was off of the main lobby.

We had returned that night, as always, and I had just had my dinner, and I was sitting with my personal assistant, and a dear friend of mine from 35 years, a guru brother of mine, as was the custom each evening. Alan, of course, came in and we discussed the logistics and the business of the next day, because all -- everyday there was a different activity planned of visiting temples and visiting different teachers, visiting sacred sites.

We finished that business, and he said that he was hungry and he was going down to the restaurant to eat, and that was normal. Shortly thereafter, still sitting in the room we heard loud gunshots. It didn't register on us at the time that they were gunshots, because it was so incongruent with the place we were -- the hotel, the lifestyle. But my friend went out and down the hallway to the balcony where he could look over, and look down into the lobby, and he saw two terrorists with their guns just shooting everyone and everything in the lobby. He ran back to the room and told me what was happening. We couldn't believe it. We immediately barricaded the door of the room with furniture. And wondered what was happening.

And then came the first of the very loud explosions, and grenades and gunfire -- the volume of which you couldn't imagine. These were no pistols, but AK-56s. These were big weapons. And the explosions would vibrate through the whole building. And, of course, being human our adrenaline started pumping and our hearts started racing, and we had no idea what was happening. Then, there was a loud explosion directly underneath us, and fire broke out. We could see the smoke and the fire rising up through the windows, and that opened on to the street below.

The room filled with smoke so thick that I could not see if you were two feet from me. We put wet towels over our faces so we could breathe. We stood near the window looking down to the street, just to see if there was any police or firemen, and the policemen came and a firemen came. And one was standing down in the street kind of signaling to us with hand language, and he pointed to the window of his fire van, in a way that said break the window.

So we broke one of the windows of the room, which was no easy feat, because the glass was really, really thick. We broke it and then the three of us huddled there sucking air for survival and holding on to each other. And then the fire trucks came and they put out the fire in the bombed out restaurant below us. And the smoke cleared from the room and the filtration system began to work.

By then, we had gotten our first calls on our cell phone from our people on the outside, our Indian hosts, and friends, and began to inform of what was happening and told us to turn on the television. Which -- we did, and began to see the news of what was happening in this terrorist attack, which is the equivalent -- or what India calls its 9/11.

Thus, we continued then, in that way for the next 45 hours. And there were constant explosions and gunfire, and just horrendous activity in the hotel. We consistently got reports from the outside, and because within the hotel we could still call room-to-room, so we could relay messages back and forth and keep each other informed in the group. And that way, we could learn who was missing, who was there, and who was unaccounted for. We could convey that by our cell phone to our people on the outside to see if they had any information where some people were.

And we, finally, over the first probably 24 hours were able to ascertain that only two were unaccounted for. And that was Alan and Naomi and we knew they had been in the restaurant down below, seated at a table with several others from our group. Three of whom were shot and wounded, and are still in the hospital in Mumbai; and one other woman who was grazed by a bullet but managed to escape. We continued in this way through the next day and night.

Again, by then the management of the hotel would call through to us and give us the progression on -- they had gotten one of the terrorists and one remained, and they kept us posted so we knew what to do, and what was going on. But we still didn't know in any moment would the door be blown down to the room, and your life was over or you'd be taken hostage, or this or that or whatever. So we just stayed there and remained as calm as we could and as meditative as we could. Stayed hunkered together and calls kept coming in then from all over the world of people that we knew, that I knew personally, who were supporting us and meditating for us and praying for us.

That continued again, of course, through the rest of the 45 hours, the lights went out, the water went out, the air conditioning went out. We were down to our last little bit of bottled water. And we had no food really to speak of. We were black, covered with soot from all of the smoke. We were raw in the throat and the lungs from the inhalation of the fumes and the smell of bombs and gunfire. And, finally, we were given word that the last of the terrorists had been gotten and the army commandos had occupied the building and were securing it. That took another five hours.

As they went room by room and secured this hotel, and we continued to hear explosions and so we didn't know who to believe. Were we talking to the real hotel people or were we talking to terrorists? So we got more confirmation from the outside that what was happening was that the commandos were going room to room, and if they knew people were in there and they didn't answer they blew the doors. And so those were the continuing explosions that we heard, and finally they told us that the commandos would be coming to the door, and what they looked like and what they would say to us and that we could open the door.

But the commandos didn't give us time to open the door. They came in with the master key, with their guns all pointed at us, and we put our hands up. We were all searched and frisked and then the room was secured. Then they told us to follow them and we walked out with only the dirty clothes on our backs.

They took us down through this hotel that you could not imagine the devastation. It was like a bombed out war zone. The hallways were flooded, glass was everywhere. Blood, bodies, horrible scene down inside the staircase, fire escape, and into the main lobby, bodies everywhere, glass, everything broken and smoky. And on the way out, we had to pass by that restaurant where we knew our friends were. And the police asked if I could identify any remains, and so we had to go into that restaurant and step over bodies, and walk through pools of blood, and back to the table where they had been sitting. They were there.

I found and identified Alan and Naomi, who were laying under the table, heads facing each other and their arms outstretched to each other and overlapping. It is one of the most challenging things I have ever had to do in life, to identify the remains of two people who I love like family.

Then we had to remain there for a long time, because debris was still falling, and they couldn't take us out, so we had to just stand there in the middle of that scene for the longest time. Time just stopped. And then they took us out through the rest of the hotel to the outside, where we were met by the American consulate, the FBI, and the State Department and taken into their custody.

We were relocated to another hotel that they surrounded like Fort Knox, and nurtured us in every way possible, brought in everything. They washed our clothes, they washed us. They brought in medical assistance. They flew in the psychiatrists who specialized in trauma and terrorism and post-traumatic stress. We each addressed for that. They supplied assistance for me to go to the hospital to see the three who were wounded and recovering and still there.

And the consul-general, himself, came to see us and they just created safe space for us, which we really needed, because -- I am very proud of our people, because during the it all, whenever I would talk to them by the hotel phone, nobody was hysterical. Nobody freaked out. Their years of meditative practice and holistic lifestyle came through for them big time, and they remained present, and wakeful, and calm through the whole thing. And then when we finally got out and we were together and gathered together, then there was a very kind of cathartic experience in which we kind of got to express our experience and our grief and our sadness.

And then, thereafter, we completed whatever needed to be completed there. And the consulate even retrieved our luggage from that bombed out hotel, and brought it to us. I mean -- just absolutely amazing the services that the United States government, in a situation like that. You have to remember, you have to understand that the city of Mumbai was on code red. This was major terrorism and for the government to operate the way that it did, in conjunction with the American government, was to me just absolutely amazing.

And then since then, during that kind of initial recovery time, we began to receive calls and communications from not only our friends in Mumbai, but Indian people who offered us everything -- their homes, their automobiles, their money, food, anything, the hospitality, the kindness, the love, and then it started pouring in from those we know all over the world. And it continues even to this day.

I have said one thing that it is pertinent to me, people in my role, are people whose life is about giving love, and nurturing, and inspiration and we do that. And we don't expect anything in return that is not who we are. We are givers. And, yet, when in a situation like this, a tsunami of love comes back to you, it is more than a human heart can bear. It is so totally magnificently overwhelmingly, and that is how we feel now.

We are sitting here and having to grieve. My heart is broken. But at the same time the love, and the beauty of humanity, and its choice to choose love over fear and violence is inspiring.

PHILLIPS: There is the amazing philosophy, right there, as Charles Cannon talks about the pilgrimage that he led to India, with his Synchronicity Foundation. It is a spiritual retreat that he took members of his organization on, and putting in perspective how something so overwhelming, so horrific, so horrible at the same time, members of his foundation even, Charles, himself, even Kia Scherr lost her husband, Alan, and her 13-year-old daughter on this trip to India, talking about love and that love overpowers fear, and they are trying to find the positive within such a devastating experience.

You also heard Charles Cannon talking about the most challenging thing for him was having to identify the remains of Alan and Naomi, those two who were killed by the terrorists in Mumbai. At the same time hearing a little bit from Kia, the wife; obviously, an extremely hard time for her right now, but on the more positive side of things, she talked about Thanksgiving Day, and seeing two stars in the sky, and thinking of her husband and her daughter that she just lost.

We are going to monitor that live news conference coming out of Virginia. Incredible testimony on how it all went down, how the survivors made it through, and also how they dealt with the loss of two people they loved very much.

The horror of a terrorist attack, well, it was caught on tape as well. This cafe at the Mumbai train station; it was sprayed with gunfire and one of the first targets of the Mumbai terrorists. Terrified patrons, as you can see, duck and run for cover. At least 179 people were killed in three days of carnage.

And these stunning pictures as well, a Mumbai terrorist, the only terrorist captured and beaten by Indian security forces. It was probably hard to keep him alive. India says that of the 10 terrorists this one is the only survivor, and he is now in the police custody, and singing like a canary, evidently. Officials say that he told them that he is a Pakistani national, and the Mumbai police chief says that all of those terrorists were on a suicide mission, and they hijacked a vessel in the Pakistani port city of Karachi. Pakistan continues to deny any role in the attacks, even with this guy's testimony.

A quick-thinking nanny is credited with saving the life of a toddler in Mumbai. CNN's Drew Griffin has the remarkable story for us.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice over): This scene came just moments after the attack Wednesday. And Indian nanny, named Sandra Samuel, is clutching a baby boy whose parents had just been murdered. Two-year-old Moshe Holtzberg crying, but unhurt. The terrorists killed the parents, Rabbi Gavriel Holtzberg, and his mother, Rivka, and four others. According to a family spokesman, it was the quick-thinking nanny, in the moments of the attack, who acted to safe herself , then the child.

ROBERT KATZ, EXEC. DIR., & V.P. MIGDAL OHR: When the siege upon the Chabad House began, the nanny locked all the doors, when she heard the commotion and went to hide. They broke into the house, and she heard them running upstairs and she heard Mrs. Holtzberg, Rivka, screaming, Sandra, Sandra, help, Sandra.

GRIFFIN: The gunmen reportedly were going room to room searching for targets. Samuel unlocked her door, and according to Katz, dared the terrorists to stop her.

KATZ: Sandra, the nanny, came out of her hiding place, ran upstairs right away, to where Rabbi and Mrs. Holtzberg were, and found them shot dead in cold blood. The baby was standing there screaming hysterical, crying and she literally picked him up and made a dash for the exits almost daring the terrorists to shoot her while carrying a baby.

GRIFFIN: With both parents gone, his grandparents are now caring for the toddler, but eventually his great uncle is expected to take over. He is Rabbi Yitzchak Grossman, and he founded a Migdal Ohr Orphanage, it is said to be the largest Jewish orphanage in the world; 7,000 children live at the orphanages' 100-acre compound in Northern Israel, and soon one more.

Drew Griffin, CNN.

(END VIDEOTAPE)

PHILLIPS: Protecting the children; we will take you to the front lines of a different kind of battlefield where the health of kids is compromised in the name of profit.

(COMMERCIAL BREAK)

PHILLIPS: 2:30 Eastern time. Here are some of the stories we are working on in the CNN NEWSROOM.

An inside look at the terror in India. New surveillance video shows what happened as terrorists began shooting at a cafe at one of Mumbai's train stations.

And a very different scene on the streets of Bangkok after a Thai court forced the embattled prime minister to step down. Anti- government groups call it a victory. Protesters are lifting their siege at Thailand's airports.

President Bush's mom released from a Houston hospital today. Barbara Bush had abdominal surgery to repair a perforated ulcer last week.

And in the auto sector, the Big Three automakers are sending lawmakers their plans for a possible federal bailout. They are also showing their monthly report cards. And the results are not very good.

Susan Lisovicz is at the New York Stock Exchange with all the details and Wall Street's reaction.

Hey, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Kyra.

Well, industry-wide auto sales in October were the worst in 25 years and so far the November numbers are even worse. Every major automaker is expected to post a double-digit percentage drop in sales. Ford and Toyota's U.S. vehicle sales plunged more than 30 percent compared to a year ago. GM, considered to be one of the weakest financially speaking, said that sales fell more than 40 percent. What is most worrisome about these numbers is that they come despite big incentives.

Most automakers are pulling out the big guns, like zero percent financing, employee pricing and cash incentives. But with the economy now officially in a recession, people just aren't buying cars, not even small, more fuel efficient vehicles.

The state of the auto industry is a huge concern on Wall Street, and the cause of a lot of volatility in the past, including today. We did see a pretty nice relief rally after yesterday's massive selloff and it is all but gone. The Dow industrials were up about 270 points at the high. Well, they're hanging in there, 25 points to the upside, or about one-third of a percent. The Nasdaq is up .75 percent. And we have about 90 minutes left in the trading session -- Kyra.

PHILLIPS: All right. We will talk again.

Susan, thanks.

LISOVICZ: You're welcome.

PHILLIPS: And we are just getting word, CNN, has apparently learned that Governor Bill Richardson will be nominated to be commerce secretary in the Barack Obama administration. Apparently, there is going to be a news conference in Chicago tomorrow. There you go, the governor, Bill Richardson, tapped secretary of commerce as a new part of the Obama/Biden administration.

Back to the Big Three bailout and the sales job of a lifetime for their CEOs. Together, they want a fortune in government help, but individually, they are three different companies with different needs. That is something Mark Phelan says that Congress needs to keep in mind before they start passing out the billions of bucks.

Mark is the auto critic for the "Detroit Free Press." He joins me now.

Mark, good to see you.

MARK PHELAN, AUTO CRITIC, "DETROIT FREE PRESS": Thank you for having me.

PHILLIPS: All right. So let's go ahead and start with your philosophy here of a bailout should be tailored, I guess is the best way to say it, right, to each automaker. Tell me why you believe that is the best way to go and how do you see it?

PHELAN: Well, the three companies are in very different situations. The one-size-fits-all is not really going to fit anybody.

Ford actually made some money in the first quarter of this year. Ford and GM both have sprawling global enterprises. They've got technology. They've got small vehicles, fuel-efficient vehicles, that they are planning to bring to the United States.

Chrysler is in a different position, because, you know, they were owned by a German company for 10 years when they were sold back to an American private equity group. They don't have the global scope. They don't have the access to small vehicles. They don't have the technology. So it is different situations for companies.

PHILLIPS: Interesting.

So out of the three, which company do you think has the best chance of surviving? Or, do you see them all sort of in the same spot? Is someone in the worst position? Someone in a better position?

PHELAN: Ford has got more cash on hand, so that puts them in the best position, short hand -- short term. Slightly longer term, a couple of years, three years, GM and Ford are both pretty well positioned, because before this market crisis hit, they had already shown us a number of very small fuel-efficient vehicles that they are going to be introducing to the United States starting in 2010.

Chrysler, again, they don't have that kind of vehicle or the ability to develop it, so they are looking around for other automakers to work with them.

Ford and Chrysler -- Ford and GM certainly can both go on as independent companies. Chrysler, it seems like the best solution is alliances with other companies or being sold to some other company that can provide them with what they need.

PHILLIPS: And you're saying executives -- not only executives, which I think is a no-brainer, right, but also workers are going to have to take drastic pay cuts. Explain some more.

PHELAN: I think that it is what the American people want.

If you come asking for a loan that is at the taxpayers' expense, even though the loan will be repaid with interest, people are going to want to see that you've got some skin in the game. The CEOs -- they are certainly going to take drastic pay cuts, but when Chrysler was bailed out, when they were on the verge of insolvency in the '70s, all of the workers, the UAW, the engineering workers, the white collar workers, all got together and they gave sacrifice as well.

And when the company recovered and made lots of money, they were all repaid for it. But you are going into it, I think that you have to say, if you will give me this help, I will sacrifice as well. I'm not just going to take the money and run.

PHILLIPS: Well what do you think of Ford's CEO driving himself to Washington in a hybrid? And I guess the other guys might be following suit as well.

PHELAN: Yes, the company jets are all grounded this week.

It is -- it's great for appearances. Honestly, it is not the best use of any of their time, nine hours driving each way to D.C., as opposed to time that they could be in the offices, dealing with these really pressing crises. But it removes a distraction from the hearings. And the fact that Ford's CEO is driving in a hybrid Escape will let him talk about technology and fuel economy. And the people in D.C. want to hear that.

PHILLIPS: Well, it's a good PR move, that's for sure.

Mark Phelan --

PHELAN: Yes.

PHILLIPS: -- appreciate it. Thanks.

PHELAN: My pleasure.

PHILLIPS: Well no little green men, but scientists are still pretty excited. CNN's Miles O'Brien -- well he is excited, too, and he takes a look at a possible sign of life on Mars.

(COMMERCIAL BREAK)

PHILLIPS: Well, in today's "Planet in Peril" segment, a scary situation, people living in conditions that are hazardous to their health, drinking contaminated water and breathing bad air. But what if the company that was harming them knew it could fix the problem and didn't?

That is the allegation chief medical correspondent, Dr. Sanjay Gupta, went to Peru to investigate.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice over): The first thing you notice are the smiling faces, the giggles. The second, is that something here is not quite right.

It is called the Casaraca School. It is located in the town of La Oroya, a town nestled high in the Andes Mountains of Peru. There are no entrance exams to get into this school, no interviews. The criteria for enrollment is poisoned blood. Every one of these children has severe lead poisoning. (on camera): What you're looking at looks like just a childhood game, but remember, all these children have lead poisoning. What happens a lot of times is they develop neurological problems which make their motor skills difficult to develop. So simply climbing up these stairs, being able to walk along a little path like this really helps them in the long run.

There you go, sweetie.

(voice over): But these kids are the lucky ones. That is because the school only takes 100 students, and it is miles from the town.

This is the reality for the rest of the children of La Oroya, schools in the shadows of smokestacks where poisoned air is inescapable. It is no secret where all the lead is coming from. The Doe Run Peru Shelter (ph).

The shelter's (ph) operators knows about the children with the lead poisoning. In fact, Doe Run funds the Casaraca school.

How is it possible then that a company can poison children, some say even kill them, and get away with it? Well, it is complicated. And it has touched off a battle pitting neighbors against each other and against Do Run.

(on camera): They already knew around the world how to make people safer, but they weren't doing it here in Peru. Why not?

(END VIDEOTAPE)

PHILLIPS: Well, you can Sanjay's full report on "Planet in Peril: Battlelines" right here on December 11. You can also go to CNN.com/planetinperil to see dispatches from the field, some amazing pictures from photographer Jeff Hutchens, and a behind the scenes look at the making of that documentary.

(COMMERCIAL BREAK)

PHILLIPS: Well, it is one of those pictures that makes you kind of squint like, what am I looking at? Short answer, nobody really knows. Longer answer, potentially the first evidence of life on another planet. Space correspondent, Miles O'Brien, has more and the Martian worm.

(BEGIN VIDEOTAPE)

STEVE GOREVAN, HONEYBEE ROBOTICS: It is about a millimeter long.

MILES O'BRIEN, CNN SPACE CORRESPONDENT: Welcome to Steve Gorevan's wall of fame. Pictures of the first holes made by humans on Mars. It is a big deal to him because his company designed the drill bits that made them on the Spirit and Opportunity rovers. But there is one picture here that could be a big deal for all of us.

GOREVAN: I came into the science room and there was only one other person from NASA headquarters there.

O'BRIEN: He was at NASA's jet propulsion lab a few days after Opportunity landed in 2004.

GOREVAN: And she comes over and she says, take a look at this. The next thing we did was, we both just looked at each other like this. And then in our minds I think we were saying, wow.

O'BRIEN (on camera): Wow.

(voice over): Now, I'm not a scientist, I just play one on TV, but that sure looks like a little worm to me, or is a it a rotini?

GOREVAN: Look, what occurred to me, of course, because I'm an engineer and I can say this, is that we were looking at a fossil.

O'BRIEN: Alas, Opportunity is not equipped to study fossils, lacking any other options, the science team ordered the rover to move on to the next rock.

(on camera): So you could have stumbled in dumb luck or whatever -- could have stumbled on literally the holy grail on Mars with a key question about life, and could do nothing about it?

GOREVAN: Yes. That is -- I think that is a fair statement. We could do nothing about it.

O'BRIEN (voice over): Bummer.

CHRIS MCKAY, NASA SCIENTIST: Pictures by themselves, at that sort of scale, will never really be convincing evidence of life. We need more direct chemical and biological tests.

O'BRIEN: Astrobiologist Chris McKay would kill for the chance to conduct tests like that on Mars. He spends much of his time in some of the more life forsaken places on our planet. I found him in Chile's Atacama desert a few years ago. The idea? Draw the boundaries of life on earth so we can better understand where to look for it out there.

So let's assume for a moment Steve Gorevan's rotini worm is indeed a fossil and is proof of a unique strain of Martian life. Then what?

MCKAY: It leads me to the conclusion that life is common in the universe. If right here, in our own little solar system, life started twice, well, then that means life is a natural phenomena that is happening everywhere, that what we see on earth is not a cosmic fluke.

O'BRIEN: If that's true, where are the aliens hiding in our galaxy? Astronomer Geoff Marcy is hot on the trail. He is the world's leading planet hunter.

GEOFF MARCY, BERKELEY ASTRONOMER: We are really searching for our own roots out there in the galaxy. O'BRIEN: He and his team have found about half of the 300-plus planets we know of beyond our solar system. Right now, technology only allows them to locate gas giants like Jupiter. But that will change next spring when NASA launches a space telescope designed to find other earths.

MARCY: You about our Milky Way galaxy -- to look up into the night sky, our galaxy contains 200 billion, with a B, stars. There are in fact hundreds of billions of galaxies within our entire universe. So if each of the stars within our galaxy has say one earth, that means there are hundreds of billions of earths just within our galaxy alone.

O'BRIEN: But here is the rub. Our galaxy is 100,000 light years from stem to star. Let's say we found another cushy birth for life half way across, it would take 50,000 years to send the alienation civilization a signal, another 50,000 for a response.

MARCY: You wouldn't be able to tell a joke and have the punchline be given at the right timing.

O'BRIEN: So for now, the scientific hunt for aliens is focused at the pond scum level in our celestial neighborhood. But it is a start. Perhaps we should send another robot to the site of Steve Gorevan's worm and take another look.

GOREVAN: You've got to have a lot more than just one little image from a hole that we dug a couple of years ago.

O'BRIEN (on camera): But, having said that, that could be it.

GOREVAN: I do -- I will admit that I often say, what the hell is that thing?

O'BRIEN: Wow.

(END VIDEOTAPE)

PHILLIPS: Miles, maybe the Martians just ate pasta. That makes perfect sense.

O'BRIEN: If the Martians were Italian. It's marinara sauce. We thought that it was kind of a rusty colored sand, it's covered with marinara. Who knew?

PHILLIPS: It's not exactly the kind of contact that a lot of people are looking for, right?

O'BRIEN: No. I mean, let's face it. A fossil or even if they were lucky and dug into an aquifer on Mars and found live worms, that's not exactly going to exactly change the world for us, because it's not like we can have a meaningful dialogue with worms. Most of the worms I know anyhow.

So, I think -- but what it does you know, the point that Chris McKay made in that piece. If you can establish that there's a whole separate -- a second genesis, a whole separate strain of life, right next door to us on Mars, you are led to the conclusion almost inevitably that it's got to be all over the place.

The big question is how are we ever going to reach them? It's just too darn far.

PHILLIPS: All right. So, let's say we do make contact with an intelligent civilization, or another planet, or find proof positive that they have visited us.

How would we respond?

O'BRIEN: Well, you know, it's interesting. I've thought a lot about this. You know, you always think of the day the Earth stood still, where they come down with a big robot in Washington, and you know, tell us either, lay down the arms and be peaceful and change your ways or we'll kill you.

I mean, that would change things pretty quickly for us, wouldn't it.

PHILLIPS: Yes, it would.

O'BRIEN: If it's one of these 150,000 year round-trip dialogues, you know, I don't know how in the course of our days, how that's going to change much of anything. Except that we would have a knowledge, or a confirmation of what I think most of us believe anyway.

PHILLIPS: Miles O'Brien, great stuff.

O'BRIEN: All right. Thank you.

PHILLIPS: Team Sanchez back there working on the next hour of NEWSROOM.

What have you got, Rick? And welcome back, by the way.

RICK SANCHEZ, CNN ANCHOR: Hey, good to see -- you know, what's really good. is seeing you and Miles together.

PHILLIPS: I know. I miss working with Miles.

SANCHEZ: I don't think there's ever been a finer team.

PHILLIPS: Well, you know what happened? We got into a lot of trouble and --

O'BRIEN: Yes, we did. Yes, we did as a matter of fact. I can attest to that.

SANCHEZ: Did you say, funner?

PHILLIPS: We -- yes, you could just say they -- I think they split us on purpose. What do you think, Miles?

O'BRIEN: There was a moment there when we got involved in some chewing gum which maybe we can roll the tape. But that's -- it's ancient history. It is --

PHILLIPS: Chewing gum. Britney Spears, Kyra and Miles in type shot (ph) that just didn't go very far.

O'BRIEN: Never mock Britney Spears or chewing gum, Rick. And just trust me, it's not good for your career.

PHILLIPS: You end up covering space.

SANCHEZ: Listen, I get enough calls from the suits all by myself. Trust me.

O'BRIEN: That's right.

PHILLIPS: I love it. we're the three living hellians (ph). We all take pride in that.

O'BRIEN: Hey, kids, let's do a show. How about it?

PHILLIPS: I've got a great idea to stir up some trouble.

SANCHEZ: Oh, god. Hey, John Klein (ph), hello?

PHILLIPS: Rick Davis, hello?

SANCHEZ: All right, listen. We've got -- Robert Gates is going to be holding a news conference in just a little bit. He's going to be talking to reporters. Everyone wants to know what's going on with a new strategy on the war on terror. So, we're going to be taking that apart.

We're going to let you hear it. And we're also going to let you Twitter your responses while you're listening to him.

And this story of Plaxico Burress, in New York, is really taking some new dimensions now. The hospital may be under investigation now for apparently trying to cover up the fact that he was there and had been treated. It's a huge story with -- as you might imagine, "The New York Post," "The New York Daily News."

And this might even be more trouble for not just Plaxico Burress but -- by the way, in case you know, is probably superstar wide receiver. Maybe one of the best football players in the country. But, now two other players from the New York Giants, who by the way, are the best football team in the country. So, this is spinning a little bit, I don't know about out of control. But, it's spinning nonetheless. who are maybe the best team in the country, but it is spinning out of control nonetheless. And we're going to be all over both of those stories.

PHILLIPS: Sounds great. See you in a little bit.

All right. We'll be right back.

(COMMERCIAL BREAK) PHILLIPS: Well, everyone could use some advice when it comes to love. But, can you get pearls of wisdom from grade schooler? This is a little boy that we've interviewed here on CNN before, Alec Greven. And when he was 8, he wrote about how the talk to girls. Well, now it's being published by Harper Collins.

Here's a little take.

(BEGIN VIDEO CLIP)

ALEC GREVEN, AUTHOR, "HOW TO TALK TO GIRLS": Most girls don't really like bugs and gross things. But and most boys don't like things like Hannah Montana and stuff like that. Sometimes you can get a girl to like you. Then she ditches you. About 73 percent of regular girls ditch boys, 98 percent of pretty girls ditch boys. Life is hard. Move on.

(END VIDEO CLIP)

PHILLIPS: Moveon.org. Alec says that he learns all this stuff by just making observations at recess.

(COMMERCIAL BREAK)

PHILLIPS: All right. That does it for us on this Tuesday. We'll see you tomorrow.

Rick Sanchez takes it from here.