Return to Transcripts main page
U.S. Unemployment Rate Continues to Rise; Big Three Automakers Back on Capitol Hill Today; O.J. Simpson to Receive Sentence Today
Aired December 05, 2008 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Labor pains, new jobless numbers worse than first feared. The CNN money team with ways that could help you make it through these tough times. We've got the jobless numbers for you.
Plus, live this hour, big three captains back on Capitol Hill. Today pleading with house members to keep their companies afloat.
It is Friday, December 5th, I'm Heidi Collins. You are in the CNN NEWSROOM.
More bleak news on the economy. Just minutes ago we learned 533,000 Americans lost their jobs last month. And that is the biggest one-month job loss in 34 years. It pushes the unemployment rate to 6.7 percent, and that is the highest rate in 15 years. Some analysts think unemployment could reach 8.5 percent by the end of the year. That grim number largely depends on the survival of the nation's auto industry.
And today the big three automakers returned to Capitol Hill. They're going to be pressing their case yet again for taxpayer loans.
CNN's money team will, of course, break down all of these new developments impacting your wallet. Christine Romans looks at the new jobless numbers and Gerri Willis is going to showing us where the jobs are.
Poppy Harlow looks at the job market online. Richard Roth has a one-of-a-kind job search, and on Wall Street Susan Lisovicz looking to this hour's open of the stock market and how it will react.
Let's go ahead and take a closer look now at the new unemployment numbers and what they mean. CNN's Christine Romans is in New York.
So, Christine, walk us through the numbers if you would. Obviously -- there you are, Christine. Obviously, these numbers much, much higher than what we were thinking. I think the estimate was about 400 or so, right?
CHRISTINE ROMANS, CNN CORRESPONDENT: You're right. And so economists were off here quite substantially. It shows you that the job losses are accelerating, Heidi, quite quickly, and it's worse than even most economists think. 533,000 jobs lost. I can't stress to you how rare it is to see a number that big in terms of one single month.
You went through sort of the details of the highest since -- the 1980s in terms of the number of jobs loss.
ROMANS: The highest in 15 years in terms of the unemployment rate. 1.2 million jobs lost, Heidi, in just the last three months. Those numbers last month and the month before when I sat here in this chair, I told you at this hour how grim the situation was, it's even worse than we thought. 1.2 million jobs lost in three months.
Again, you have to go back to 1974, the end of 1974 and into 1975 for a three-month period when you had that many people out of work losing their jobs in one month. So think back to that time. It was a tough time in the economy. It was a big bear market then, and we are in the jaws of another bear here clearly right now.
Let me run through some of the areas where we saw the job loss. Retail down 91,000. Unusual heading into the end of the year and the holiday season to see...
ROMANS: ... retailers laying off people when they need them most. Manufacturing down 85,000. No surprise there. We have seen that again and again. Construction down 82,000. You saw hotels and restaurants losing 54,000 jobs.
Again, this is the end of the year. You have holiday parties. This is the time when typically you're seeing jobs added in these areas, you're seeing jobs lost.
One rare bright spot, I've been saying it all year, health care.
ROMANS: Anything that touches a patient or a hospital is adding jobs. Health care jobs up 34,000. Up this year 369,000 jobs. Honestly, anything that touches a piece of equipment in a hospital, they're adding jobs there.
Education in a hospital, Gerri is going to have more on that for you, I know, but it is the rare bright spot here. Health care, almost everything else losing jobs much more than anyone on Wall Street anticipated, and certainly people on Main Street have already been feeling this.
But it is -- this last three-month performance down 1.2 million jobs in just three months.
COLLINS: Wow. Man. All right. Well, we are watching that very closely, and I'm going to try to offer some, some more bright spots throughout the show this morning, obviously.
CNN's Christine Romans, sure do appreciate that. Thanks, Christine.
Job losses on Main Street. How will they affect Wall Street? Just about 25 minutes from now we're going to be going to the New York Stock Exchange, of course, for the start of the new trading day. We'll be watching those numbers closely for you.
So this is a simple question and homes, car payments, and utility bills ride on this answer. Where can people find jobs now? So here with some answers, CNN's personal finance editor Gerri Willis. She's joining us from a career counseling center in Yonkers, New York.
So, Gerri, is it all doom and gloom there? We did just hear from Christine and we've been hearing it for a while about the health care industry.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Yes. It's not all doom and gloom. In fact, there's sometimes a mismatch between the jobs out there and the skill sets out there.
Here to help me right now, Charlie Bruno runs the job center here in Yonkers. I'm just north of New York City.
Charlie, tell me, if you would, what you're seeing right now. You say you're seeing increases in the number of people coming through your doors that you will train.
CHARLIE BRUNO, YONKERS OFFICE OF WORKFORCE DEV.: Yes. We're definitely seeing increased numbers over the last actually number of months, but certainly over the last month or two, significant numbers, and there are, in fact, though still jobs out there.
Some of the problem we do have, though, is the match. There are people out there looking for jobs, but they're -- they do not match what is needed by the employer.
WILLIS: Right. And, and what are those jobs that you find go wanting because people don't have the right skill sets?
BRUNO: Well, certainly there's still a tremendous amount of opportunities in the health field, I.T., the math and sciences, engineering and the like. There are those certainly significant amount of jobs of which, though people do have the skills which there are not a lot of opportunities because of the situation at this point in time.
WILLIS: Charlie Bruno, thank you so much for that.
Heidi, I want to tell you just a little bit about how this works on a national level. Where we're seeing the mismatch. We took a look at some of the hot sectors in the industries across the country.
What are the industries that are growing?
WILLIS: You mentioned health care. That's definitely one of them. Take a look at this list from Mercer, a global human -- human resources company. Health care huge. There'll be an additional 500,000 jobs in nursing alone over the next six years. Also home health care aides, you name it. You can have any level of training now and find something in health care that's a real opportunity out there.
Also, oil and gas utilities. What's going on in those two sectors. We find the boomers with specialty training, engineers, they're retiring. There's not a lot of people with those kind of skill sets out there that can actually do those jobs.
Finally, education. Whether you're a teacher, post secondary, high school, elementary, you name it, those people are in demand, even teaching aides.
If you want to take a look quickly at the jobs out there that are going big, nurses, I mentioned them before, home health care aides, again, health care, auditors, finance. Obviously not people on Wall Street, no the big Wall Street investment bankers.
WILLIS: Nobody is looking for those folks right now, but they're certainly looking for people who can run the numbers in individual companies, whether that's a bookkeeper or an auditor or an accountant.
So, again, the level of experience you need to get into those jobs varies. It's not just people with very high level degrees who are looking for jobs. Computer software engineers, again, there's a lot of people retiring right now. Boomers who are leaving the business who need to be replaced.
So there are opportunities, Heidi.
WILLIS: It's just -- you know, you just have to find the right match out there and make sure that the skill set that you have matches the need out there, and that is the trick in this economy. So there's lots of negative news, but as you know, this economy, there are areas that are growing, even though many areas are contracting.
COLLINS: Yes. No question about that. But I like talking about, you know, what is available because, obviously, we don't want everybody to just give up hope on -- because a lot of people really think, boy, I have no training in this area. It will take me forever to get that education in order to actually go out and land a job.
So maybe, Gerri, if you can tell us quickly, what are some of the first steps? I mean should everybody just go back to school or how do you find out where you can fit into this tight job market?
WILLIS: Well, you know, I have to tell you, one of these job centers is a great place to start because they will be able to hook you up with additional training. And remember, in some cases you don't need a post secondary degree to get into the industry. You can start small steps, baby steps, with an assistant job or, you know, trailing someone who actually is a pro. At the end of the day, you may want to go back and get more education, but I know a lot of people out there do not have the savings to do that right now.
WILLIS: Start with your local jobs center. Make sure your resume is in order, make sure it's actually selling you and your experience in the right way which means it tells people exactly what you've accomplished in your professional career, and I have got to tell you, it's all about getting the help you need, and a lot of this help is available in local offices just like this one.
COLLINS: All right. Well, we sure do appreciate it because a lot of people out there just really not knowing where to start.
CNN's personal finance editor Gerri Willis. Gerri, thanks for that.
Making a move from the unemployment line to online. Is your next job actually posted on the Internet? Answers this hour from Poppy Harlow of CNN.com. So make sure you stick around for that.
It's your money and the big three automakers want it. They're back on Capitol Hill this hour in search of a taxpayer loan. They say their survival depends on it, and time may be running out.
CNN congressional correspondent Dana Bash is setting the stage for us this morning.
Dana, good morning to you. Day two, huh? Well, actually I guess it's take two, day two.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Take two, day two. That's a great way to put it, Heidi, because that is exactly what we're going to see. In just a little more than 15 minutes over on the House side, these CEOs are going to come back and once again hope that their second chance has some fruit that is born from what they are trying to do, which is be very, very contrite but still their big challenge is convincing very split lawmakers that it's worth it.
BASH (voice over): With choreography for the cameras, the big three CEOs return to Capitol Hill in fuel efficient cars instead of pricey private jets. Lesson learned when it comes to public relations. Determined to convince wary lawmakers they learned bigger lessons about restructuring their struggling companies.
RICK WAGONER, GENERAL MOTORS CEO: We're here today because we've made mistakes which we're learning from.
ALAN MULALLY, FORD CEO: It used to be that our approach to our customers was if you build it, they will come. Now we are aggressively matching production to meet the true customer demand.
ROBERT NARDELLI, CHRYSLER CEO: We've identified approximately $4 billion of potential cost savings and improvements.
BASH: The CEOs came armed with new business plans that Congress demanded, promises to consolidate and modernize, concessions from autoworkers unions to help cut costs. But skepticism that taxpayer money would be well spent in Detroit is still deep.
SEN. CHARLES SCHUMER (D), NEW YORK: I don't trust the car companies' leadership. I worry that if they're left on their own they'll be back a short time later asking for more.
BASH: Executives expanded their rescue request to $34 billion. One panelist warned an auto turnaround could eventually cost $75 billion to $125 billion.
Republican Richard Shelby, who opposes any bailout, pounced on that.
SEN. RICHARD SHELBY (R), ALABAMA: If they got to $34 billion, how long will it be before they're back here in your, in your judgment?
MARK ZANDI, MOODY'S ECONOMY.COM: I think it will be...
SHELBY: Six months?
ZANDI: No, it will be fall late.
SHELBY: But they'll certainly be back.
ZANDI: I think that's a high probability.
BASH: The committee's top Democrat told CEOs he still has a lot of unanswered questions, but also warned colleagues that doing nothing would be playing Russian roulette with the economy.
SEN. CHRISTOPHER DODD (D), BANKING CHAIRMAN: I'm not a miracle worker, no one is here, but I'm not going to, I'm not going to pack a bag and leave and go back to Connecticut. I'm going to stay here and try and get this done.
BASH: Now there are a lot of ideas floating around about how to do that, how to get this done. One that seems to be taking hold more than others is the idea that the government should be very heavily involved in restructuring these companies in order for them to get this loan.
Perhaps an oversight board or perhaps one individual, maybe inside the Treasury Department, who would be in charge, really in charge, of restructuring the companies, but there are a lot of different ideas even with that particular concept that are being floated around and different points of view in terms of philosophy and how to do that.
So that is...
BASH: It's not definite that that could happen, but I can tell you, Heidi, that even after today's hearing, I'm talking to senators who say that they're going to be on the phone working on this all weekend long because they're hoping to get something perhaps on the Senate floor next week.
COLLINS: All right. Very good. And obviously the key word here is loan, and so obviously they're very interested, these lawmakers and -- if this does happen, in getting that money back.
COLLINS: As you can see they're going to try their very best to make those packages work out in order to make that happen.
Dana Bash, thanks so much, our congressional correspondent today.
Adversaries in the past, now a new relationship between the automakers and the autoworkers. Plus no shame in making this a public spectacle.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: When you're out of work and face having nothing, I mean, having no income, you're -- there is -- pride doesn't mean anything. You need to find work. I have to take care of my family.
(END VIDEO CLIP)
COLLINS: A sign of the tough economic times.
ANNOUNCER: News as it develops as only CNN can bring it to you. See for yourself in the CNN NEWSROOM.
COLLINS: The big three CEOs aren't alone before Congress. The head of the United Autoworkers Union is also there talking about how the union fits into the equation.
Charles Craver is a labor law professor at George Washington University. He's joining us now with a little bit more on the whole scenario that we are expecting to see today.
Thank you for being with us, Professor. We sure do appreciate it. We had you yesterday and you were able to give us some insights so we wanted to have you come back on today because we have more hearings, obviously, that we're going to be watching coming up in about 15 minutes or so. That being said, I would like if you'd listen in with me to something that Senate Banking Committee chairman Chris Dodd said yesterday and then I'll get your comment.
(BEGIN VIDEO CLIP)
DODD: The only person at that table, the only person at that table who has actually done something is the UAW. They've not said what we're likely to do. They said what they're going to do, what are doing.
(END VIDEO CLIP)
COLLINS: Do you agree with that? I mean do you think the actual UAW workers sort of came out as the good guys in all of this after yesterday?
CHARLES CRAVER, LABOR LAW PROFESSOR, GWU: Yes, they did two things. In 2007 they renegotiated the new contract. They agreed to a dual wage and benefit system where new hires are not doing as well as the older hires, and this week President Gettelfinger of the UAW agreed that they would be willing to go back to the bargaining table to help the companies be successful with reorganization.
COLLINS: What other realistic options do they have? If they continue to be the ones who offer concessions, and I'm sure that at some point that will stop because they're not going to want to be the only one who feel like they're at the bargaining table, but are there other things they can do?
We talked a lot yesterday with you about the amount of retirees. I think we mentioned just one of these big three has something like 275,000 retirees who are getting huge pensions that they feel they very, very much deserve after giving their entire careers to these automakers.
CRAVER: The biggest problem they have is the union technically doesn't represent the retirees. The Supreme Court a number of years ago said that retired people are not employees under the labor laws, and as a result the union can't negotiate changes.
If the company has reserved the right to change the health care, which is a huge factor for retirees, they might be able to do that unilaterally. If not, their only choice is to go to the retirees and see if there's some way they can negotiate a reduction in perhaps the benefits and possibly the health care coverage.
If not, their only option would be bankruptcy reorganization where the court could eliminate some of the coverage provided for retired workers.
COLLINS: I want to talk to you about that in just a moment. But do you think it's realistic -- it's asking an awful lot, isn't it, to go directly to the retirees and get them to say, yes, you know what, I'll give up some of my, some of my benefits that I worked so hard to receive later in life? CRAVER: What gives the company tremendous bargaining power right now is their desperate economic situation. The option to the retired workers is, if you don't talk to the company and cooperate, they will go into bankruptcy court and do what United Airlines did several years ago. They got rid of $10 billion in retirement benefits.
COLLINS: Yes, very familiar, as my husband worked there at that time. That's exactly what I was going to ask you about. You know, there have been other industries who have had to go that route. How is the auto industry different?
CRAVER: They aren't really different. They may still have to go that route and that's a question many economists have been talking about, whether the $34 billion bailout will simply postpone the inevitable or whether it really will allow them to reorganize and compete in a global market.
For years they were totally dominant in the United States market. Today there's no such thing as the United States market. There is a world market, and they are competing with Toyota and corporations from all over the globe.
COLLINS: Yes, and I also wonder about the strength of unions throughout all of this. A lot of people say, you know, unions just really don't have the power anymore, and if any of them do, it would be in the auto industry.
When all of this is said and done, what does that say for the power of a union?
CRAVER: Union power has declined dramatically. In the mid to late 1950s, unions represented 35 percent of workers in the private sector. By 1980 when President Reagan was elected, it was down to about 22 percent.
When we had the PATCO crisis where he terminated over 12,000 striking PATCO workers who were committing a crime against the federal government, it sent a signal to the private sector, it's all right to challenge unions.
Last year, at the end of last year, the union rate in the private sector was 7.5 percent. Unions today are shrinking, they're being challenged by employers. They don't have a lot of bargaining power because the companies don't have the money. They're highly automated. They're very diversified. They have corporation plants all over the world. Unions are fighting for their very existence today.
COLLINS: Yes, it's fascinating. We sure do appreciate your time once again, Professor Charles Craver of George Washington University. Thanks so much.
CRAVER: Thank you.
COLLINS: And we will likely call you again to see us through all of this. Thanks so much.
CRAVER: My pleasure.
COLLINS: Crashing car sales send Honda to the pit. The automaker is pulling out of Formula 1 racing and trying to sell its team now, citing the global economic slowdown. That is sparking concern for other carmakers and that they might pull out and cripple the worldwide racing series.
No future -- excuse me, no word on Honda's future in U.S. based Indy car races.
A week after the Mumbai attacks, new fears in India now. Why security is at an all-time high at airports.
COLLINS: Quickly want to give you a fast look here at some of the hearings that are going to be happening today. This is actually going to be before the Financial Services Committee now. Day two, if you will, of the auto industry stabilization plan.
You see General Motors CEO there Rick Wagoner and the other CEOs are also in the room. Ford's Alan Mulally and Chrysler's Bob Nardelli. So we will continue to watch that, these hearings to get under way, I believe, around 9:30 or so. So we, of course, will bring any news to you out of these hearings should we see fit.
Nerves on edge all across India. The U.S. State Department says the Indian government has been warned terrorists may be planning to attack Indian airports and flights today or tomorrow.
CNN's Sara Sidner is in the capital of New Delhi with more now.
SARA SIDNER, CNN CORRESPONDENT: Security is at an all-time high at airport across India and that has to do with a couple of reasons. Number one because of an intelligence report that warned of some sort of airborne attack here in India more than a week after the Mumbai attacks.
There was also the sound of gunshots heard outside Indira Gandhi International Airport this morning about 2:00 a.m. Authorities say they believed it had something to do with local elements as they dubbed it. They say they have no evidence whatsoever that there was any sort of terrorist attack in that particular incident.
What I can tell you is that we've been to the airport today. We went to see the scene. Basically what we saw are members of the security guard outside of every entryway and every exit holding their assault rifles and being very vigilant in watching who is coming and going inside and out of the airport.
Basically passengers are flowing through the airport. Airline personnel are flowing through the airport and security guards, but anyone who's going to the airport to pick up passengers have been kept outside. Basically the scene has been cleared. The airport is running as normal, but, of course, passengers are being told to be vigilant as well. All in all, the public is pretty jittery after a terrible week here in India that involved several sieges in Mumbai and now a scare at the airport.
Sara Sidner, CNN, New Delhi, India.
COLLINS: You may remember the little -- boy who lost both parents in the terrorist attacks in Mumbai. His life was saved by his nanny. It is an incredible story. She describes that terrifying day in a heart wrenching report you don't want to miss. That's going to be coming up in our 10:00 hour right here in the CNN NEWSROOM.
Big three's big plea. Automakers giving it another try on Capitol Hill. Live pictures there for you inside the House Financial Services Committee. We're going to be bringing those pictures to you as they ask the House for help. That hearing just about to get under way.
COLLINS: There we go. We're looking at, believe it or not, the opening of the New York Stock Exchange. This is the group in Vail, Colorado called Birds of Prey. It's a FIS Men's World Cup Downhill Race. And they are ringing the bell from Colorado today.
So the trading day has begun, even though, as you well know by now, this has been a brutal year for the labor market, and this morning's report from the government shows last month was the worst of all.
Susan Lisovicz is not at Vail. She's at the New York Stock Exchange now with how investors are reacting to this report.
Boy, I wish we could stay on the shot of the Rocky Mountains instead of what we have to talk about today, because I'm sure the markets are going to react to this quite poorly.
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, they're going downhill, just to use the Vail analogy, Heidi.
LISOVICZ: You know, this is really the culmination of something that we've been seeing with increasing frequency.
Just this week alone, yesterday we told you about 20,000 jobs cut basically in one day from a wide variety of companies, whether it was DuPont or AT&T or State Street, a financial company, or media companies like Viacom and NBC.
The expectations for the November jobs report were revised lower but this number came in lower than that -- 533,000 positions. More than half a million jobs were cut in one month alone. That's the most since 1974. Economists anticipated about 300,000.
So far this year just under 2 million people have lost their jobs. Remember, the U.S. economy should be creating at least about 100,000 jobs a month to keep pace with population trends. Meanwhile, the unemployment rate ticked higher, rising to 6.7 percent. That's a 15-year high.
Losses were widespread with the -- manufacturing sector continuing to suffer quite a bit. The only areas of growth were basically government and education. That's a trend we've seen for some time.
The service sector, the broadest part of the economy, especially hard hit losing 370,000 jobs. That sector usually somewhat immune to recessions, but remember this recession is a year old now. And these numbers are for November. So we're not calculating the stuff that we've been talking about this week. At least 33,000 jobs cut have been announced this week.
You know we're in the teeth of the recession here, and that's why there's such a big focus, one of the reasons why there's such a big focus about what's happening in Washington with the big three automakers continuing to testify.
LISOVICZ: Basically pleading for aid.
COLLINS: Yes. In fact, Susan, you know what, we are going to get to the chairman, Barney Frank, obviously, of the House Financial Services Committee. We want to go ahead and listen in for just a moment. So pardon my interruption, Susan, but let's listen to some of the opening statements now.
REP. BARNEY FRANK (D), CHMN., FINANCIAL SERVICES COMMITTEE: ... mitigated disaster. The Labor Department reported this morning that during the month of November there was an increase in unemployment that was quite substantial. 533,000 jobs lost.
On a year to year basis from December of last year to December of this year, we are down 1.9 million jobs. We are on track now to lose well over 2 million jobs, obviously, in that period. We will lose close to 2 million jobs in this year alone.
Given that, any effort to denigrate the negative impact of substantial job loss and economic cutbacks in this industry has to fall. We operate, as we said, in this very difficult context.
It's important to note here that -- and again I guess the issue is should we just be very hard-nosed and say let them go bankrupt? There is a consensus that substantial reorganization is needed. There was a consensus that a change in the product mix is needed.
There is a consensus, and I congratulate Mr. Gettelfinger and the union, that economic times being what they are, everything has to be looked at, including further concessions which the union had already made and there was some very important ones that were put out there.
All of that can be done by rational people in a sensible atmosphere. What bankruptcy is, is the ability to walk away from debt. The fact is that while we have this serious job loss, we continue to have a serious credit crisis in this country. We've got a double whammy.
And a commission to these three large entities to stop paying their debts -- that's called bankruptcy -- would greatly exacerbate the credit crisis. I was given by my colleague from Michigan, Mr. Levin, who's been, along with the other members from Michigan, both Democratic and Republican, obviously very much involved in this as well as some members from Ohio, very important numbers about what the impact would be if we were to have these entities stop paying their debts.
Now we have had a pattern of intervention that this administration has led of trying to prevent people from not paying their debts not because of concern for them, but because of the impact it would have on other people, on the creditors.
We have not on the whole bailed out debtors. We have gone to the rescue of creditors. In every one of those cases there have been restrictions imposed on the debtors. That will clearly has to be done here, and everyone can understand that.
The companies have made some proposals. I hope we will do something because I think for us to do nothing, to allow bankruptcies and failures in one, two, or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster.
And one of the things that I do want to note, and people should well, you know, a lot of mistakes were made. The companies made mistakes. Congress made some mistakes. We didn't increase CAFE standards, et cetera. Yes, a lot of mistakes were made.
The relevance of that, it's partly this. It would be nice if we could line up all the people who made the mistakes and punish them in a way that would have no impact on the innocent.
I think all of us remember in school the teachers we hated most were the teachers who said, if one person misbehaved, the whole class would get extra homework.
I don't want to give the whole country extra homework because automobile executives in the past misbehaved. We have to separate out unhappiness and anger over things not done in the past from the consequences now, and that's what we are focused on.
Yes, a lot of mistakes were made, too passive. The auto companies made mistakes. Unions made mistakes, politicians made mistakes. The media hasn't always distinguished itself, although you're not supposed to say that.
The consequence of all those mistakes is that the country is to some extent held hostage. We need to free the country, and that's the focus. Yes, there have to be changes that are made and sacrifices made, but the focal point is not to punish those who made the mistakes.
It is to prevent further damage to the country, and it's in that context that this committee will proceed.
The gentleman from Alabama is now recognized for how many minutes? Five minutes.
REP. SPENCER BACHUS (R), ALABAMA: Mr. Chairman, I want to begin by noting that before the present financial crisis hit, many in the trends in the domestic automobile industry were positive.
The union had made concessions. The cost had come down. Quality was up. Perception I don't think has caught up with reality in that regard. The reality is that Detroit is making good cars.
Having said that, our number one obligation must be the taxpayer, but we must also recognize that a failure of GM or Chrysler would have a detrimental effect on America, particularly at a time when our economy is under such stress.
All of us should remember that government has no money of its own. In order to give, it first has to take. As I have said since day one, taking from the vast majority of citizens whose wages, health benefits, and pension plans are less generous than those of the management and labor force at the big three appears neither right nor fair.
Personally, the only course I could possibly endorse would be limited transitional assistance to allow the American domestic automobile industry to return to solvency and profitability, but then only if there's a reasonable expectation of success.
I am convinced that short of a protected restructuring of General Motors or Chrysler, the domestic automobile industry will not be successfully remade and there will be no lasting solution to the considerable challenges that it faced.
Such a restructuring is essential not only for GM and Chrysler, but for the future of Ford and the hundreds of companies which supply and support all automobile makers in the United States, foreign and domestic.
That's why I have invited Professor Edward Altman to testify at today's hearing. He proposes not a bailout, not a bridge loan, but a restructuring that promises to place the U.S. automobile industry on a path to long-term viability.
Professor Altman's solution or ones like it certainly appears to be preferable to the continued deterioration and ultimate failure of the domestic automobile industry. With its devastating consequences for the country, the economy, and the workers and families whose jobs, pensions, and health care benefits are dependent on the industry. Let me close by saying it is a solution not by Congress that I am proposing, but by the industry itself, but with the supporting role by the U.S. government. Preferably through the participation of those financial institutions which received hundreds of billions of dollars of taxpayer money under TARP or various Federal Reserve credit facilities intended to be used for loans to the American businesses and manufacturers like GM, Ford, and Chrysler and their suppliers.
In the event, and I'm very disappointed that that lending has not been available, but in the event the taxpayer monies are still necessary to support the restructuring, money is already appropriated under the 136 program and could be utilized.
What we need is a solution, not a first installment.
Mr. Chairman, I would like to reserve the balance of my time.
FRANK: The gentleman (INAUDIBLE) and the gentleman from Pennsylvania is recognized for five minutes.
UNIDENTIFIED MALE: Mr. Chairman, we meet again today with familiar faces, and I hope we are...
COLLINS: All right. So there you see the opening statements from both the chairman, Barney Frank, and then also Representative Spencer Bachus. This is the Financial Services Committee, day two -- round two, day two, as we have said earlier, for the auto industry stabilization plan.
This is the second time now the big three CEOs have come back to Washington and asking for that $34 million bailout. They are elaborating on their plans for what they would do with the money and explaining a little bit further about how without that money they say their companies would no longer exist.
We will continue to monitor these events and, of course, bring you the statements once the big three GMs -- the CEOs, I should say, come to the microphone. We will watch for you and bring it to you live.
Let's take a quick break now. We're back in a moment right here in the CNN NEWSROOM.
COLLINS: Quickly want to show you the big board now. A little bit surprising, at least so far today. Dow Jones Industrial Average is down by 93 points. The reason it's surprising is the future is just about 15 minutes before the open were expecting to be down about 170 points directly after the news of the new jobless numbers that came out.
If you didn't hear that, quickly, 533,000 jobs lost in November. That is, obviously, a number that is incredibly low, incredibly disconcerting. So we're going to continue to watch those numbers and again now, going down a little bit more there by 110 or so. So we'll keep our eye on that as well.
For now, though, I want to get over to CNN's Dana Bash standing by on Capitol Hill to give us more information along the same lines, Dana, because we have just now heard from the chairman and the ranking member of the House Financial Services Committee regarding this $34 billion auto bailout.
I'm not sure if you were able to listen to Spencer Bachus, but he said something that we were kind of talking about a little bit yesterday. He said perception has not caught up with reality with regard to the quality of the cars that are being manufactured in the United States.
He says yes, you know, there's a lot of great cars being made, but how do you get people to buy them? Something that's at the heart of this issue.
BASH: There's to question about it, and I was talking to a senator from Michigan, Debbie Stabenow, this morning who is saying just that, that part of the problem now is that because there is such a poisonous atmosphere, and because all of the news, all we're talking about and people out there hear is how bad things are and -- so they're even more reluctant to buy the cars. So it's a vicious cycle.
Now, Spencer Bachus, as you know, is from a southern state that actually produces foreign-made automobiles, so that's another thing to keep in mind as we talk about this, that everybody up there talking has a different point of view and perhaps a different angle on this.
But one thing as we were coming to speak, Heidi, that I heard that was very interesting was from Congressman Paul Kanjorski, who -- a Democrat from Pennsylvania, who has in the last hearing was very aggressive in his skepticism with the CEOs.
He just said, wait a minute, it's clear it's going to be very difficult for us to agree on anything right now, so he just proposed giving GM the $4 billion that they say that they need so that they won't go bankrupt. Do that before the end of the year, and then come back and try to work on more broad legislation.
So that was something that was interesting that was just proposed. An example of the fact that everybody is throwing out ideas to figure out...
BASH: ... if they can do something.
COLLINS: I wonder, though, Dana, how, how that will be received. You know, it appears that way, obviously, don't want to rush into just throwing billions of dollars around. But there are, I'm sure, going to be people who are skeptical of stretching it out even further and further.
BASH: Absolutely. There are going to people skeptical on all sides of this, but it does seem, it does seem that for the most part, at least in getting the sense of things around here yesterday in that hearing, that people are a little bit more sort of attuned and they buy the argument that this could be an economic calamity if something doesn't get done.
So there definitely is still a divide and there's no consensus on how to do that, but it is interesting that there are -- there are more ideas than we heard before of just how to at least have a stop-gap measure for -- for Detroit -- Heidi.
COLLINS: Yes. Understood. All right. CNN's Dana Bash on Capitol Hill this morning.
Dana, thank you.
COLLINS: The heads of the big three auto companies are back on Capitol Hill, as you know by now, this morning. After hours of grilling before the Senate Banking Committee yesterday, they now are making their case for that $34 billion taxpayer loan. That's happening for several hours we expect today.
We're going to watch it for you, but meanwhile, how are their efforts playing out on the auto assembly lines back in Michigan?
CNN's Brooke Baldwin is there this morning. She's live from Lansing now.
It's a good question. You know we wonder a lot about the people on those assembly lines and how they are feeling about their jobs.
BROOKE BALDWIN, CNN CORRESPONDENT: I think in a word, Heidi, the word is frustrated. And by the way, I am standing on the assembly line. I don't know if you can tell that I'm moving. But this is fairly amazing access that General Motors has granted us today so that we can get to the heart of the matter.
We are sort of in the automotive trenches, if you will. You are looking at the assembly line. Teams of two have 111 seconds before the next car comes along to get the rear carpeting in, to get the shifters in these Cadillacs, to get the seatbelts worked out, to get the shocks in the cars.
They have to work fairly quickly, and as you mentioned, we're checking in on the mood of these folks. And someone who can certainly talk about mood is the regional plant manager. This is Randy Thayer.
And Randy, you're at Lansing, home bred from here. First tell me, how many cars you all produce, let's just say, per day?
RANDY THAYER, REGIONAL PLANT MANAGER: About 500 cars -- excuse me, cars per day, we run eight hours on days. We do run a ten-hour shift on nights. We built the CTS, which is the Motor Trend Car of the Year, as well as the STS and the SRX, three Cadillac models here.
BALDWIN: About 1800 employees. Two shifts for now. The mood has to have changed given what's happening in Washington.
THAYER: Certainly. The mood changed a lot when the financial markets collapsed. And of course, the auto industry has taken the brunt of it. But it's been the housing market, it's been everything. So people are very tenuous about what's going on in the entire country.
BALDWIN: A lot of people -- Americans are tenuous when it comes to American auto workers. And you talk a little bit about the myths, the misconceptions people have. What would you like to dispelled?
THAYER: Well, you've been here this morning. You see how hard these people work for their, for their paychecks. This is not easy work. But a lot of proud people building high quality cars. We actually export these vehicles to 45 different countries.
So this, this plant and other GM plants are highly competitive in both quality and productivity. And we can do that even in the export business.
BALDWIN: And today as the big three CEOs are sitting in the House, you know, and they're trying to argue their point that they can survive, what do you do? Just come to work each and every day and just hope you have a job?
THAYER: Yes. My job is to make sure the next car going off the line over there as high quality and low cost as we can make it...
THAYER: ... to satisfy the next customer.
BALDWIN: Randy, we appreciate it.
And by the way, the whole issue is certainly hitting this plant, the Grand River Plant hard, Heidi. We understand they're losing several hundred workers. They'll be laid off in February because of the decreasing consumer demand for, for these cars in the country.
COLLINS: Yes. All right. Well, we are watching that closely, too. Everybody thinking about the workers in all of this.
Brooke Baldwin, thanks so much.
COLLINS: Great report from Lansing, Michigan right on the assembly line there.
COLLINS: Well, it is contagious, believe it or not, but it also makes you feel pretty good. New study gives you a reason to smile. We all need that.
(COMMERCIAL BREAK) COLLINS: Quickly just a reminder now. We are watching, monitoring the big three bailout. This is -- well, we've been saying, take two, day two, second time around for the big three auto executives to go before Congress, to go ahead and try and get that $34 billion loan for them.
All three of the executives are there at the table getting ready to make their statements, so we have GM, Ford and Chrysler, obviously. Also the president of the UAW is there as well.
We will monitor that for you and bring you any events should they be warranted.
For now, though, desperate times deserves some pretty desperate measures. And one unemployed man is trying to find a creative way to find a job.
CNN's Richard Roth caught up with him on the streets of New York.
RICHARD ROTH, CNN CORRESPONDENT (voice over): He looks like a typical commuter wearing a suit and tie in the crowds of workers pouring into Manhattan.
Paul Nawrocki doesn't have to go far to get to his office. It's right on the corner. His jobs these days is to look for a job. And he's making sure people know he is available by wearing this large advertising board.
PAUL NAWROCKI, LOOKING FOR WORK: What I was doing wasn't working. When you're doing something and it doesn't work, you have to do something different.
ROTH: Nawrocki worked in the toy industry in operations for 36 years. He was laid off in February shortly before his company went bankrupt.
NAWROCKI: My daughter said to me, she said, you know, you should take some resumes and hand them out on the streets.
ROTH: Paul's unemployment insurance will soon run out. His wife is partially disabled and his daughter has student loans.
(On camera): How humiliating is it for you right now walking on the streets of Manhattan with a sign like this?
NAWROCKI: When you're out of work and you face having nothing, I mean having no income, your -- there's -- pride doesn't mean anything. You need to find work. I have to take care of my family.
ROTH (voice over): Nawrocki stands in the cold for hours. New Yorkers, used to the homeless and sidewalk pitch men, look but don't often stop.
UNIDENTIFIED FEMALE: I feel sorry for him. I wish I could help him.
ROTH: A passerby offers a suggestion to try down the street at the United Nations. And he becomes a photo op for international media.
At Paul's favorite corners, some competition from charity groups and then from a young man searching for a girl he likes whose phone number his roommate threw away.
There was one hopeful moment.
UNIDENTIFIED MALE: I'm a head of an executive search firm...
UNIDENTIFIED MALE: ... in New York. So why don't you give me your resume and...
ROTH: Nawrocki takes a break at a nearby park to check e-mails.
NAWROCKI: Nothing so far. A lot of junk mail.
ROTH: It's a sign of the times.
Richard Roth, CNN, New York.
COLLINS: Well, if you're happy and you know it, can you spread the joy? Researchers want to know if happiness is contagious. And boy, oh, boy, do we hope it is.
CNN medical correspondent Elizabeth Cohen is happy to be here. She's here to break down what the researchers found out.
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: We're going to do our part by being happy, spreading happiness to all the people who are watching us.
COHEN: Because what they found in the study in Harvard and the University of California, Heidi, is that, kind of like the flu or a cold, happiness really can be contagious.
Let's take a look at what they found. They saw that when people had a friend who was living nearby, like say within a mile of their house, that person's happiness went up by 25 percent, because they had this friend nearby.
COLLINS: Come on.
COHEN: Well, it's come on, you say.
COLLINS: A mile away? You can feel the happiness?
COHEN: Well, you can do things with them, right? If the friend lives in the city...
COHEN: ... even just -- you know this way you can just call up, go get some ice cream. And if you're happy -- that's what I do. If you're happy, then your next-door neighbor's happiness goes up 34 percent.
So what's interesting about this is even if you are not really friends with your neighbor, even if you don't really like your neighbor, you're still spreading your happiness. Somehow they are able to feel those happy moments, those -- that happy karma. Somehow they can feel it and it's having an influenced.
COLLINS: Happy, happy Georgia. I don't know, though, if you don't like your neighbor, do you ever think that they're happy? But that's completely outside the study.
COHEN: That's, that's -- yes. I can't even...
COLLINS: Obviously, if you are a happy person, I imagine, you know, like your life expectancy goes up, your health improves, right?
COHEN: It does. There's actually been decades of research that shows this, that your outlook on life affects how healthy you are physically. So let's look at what this means. People who are healthy, who -- people who are happy have less pain. They heal faster when they have a physical injury, and they actually do live longer.
So it's not -- no mistake when they look, for example, at centenarians.
COHEN: Most of them have a happy outlook on life. That's how they got to be a hundred.
COLLINS: Sure. My neighbors are on the phone. Yes, Ashby and Andrea, I don't hate you. No -- does money, does money make us happier?
COHEN: You know what, it doesn't. I mean...
COHEN: Or maybe by a teeny, tiny bit. And this was something, this is something that, I think, a lot of people will find surprising. What they found in this study is that folks who got a salary increase of $5,000, their happiness quotient went up by only 2 percent. That's not very much.
Other things like having a happy friend were much more effective at making someone happy. So if you think, oh, gosh, if I just get this raise, I'll be the happiest person in the world.
COHEN: No, you won't.
COLLINS: Surround yourself with happy people.
COHEN: But if you get - exactly. That will work.
COLLINS: All right.
COLLINS: CNN medical correspondent Elizabeth Cohen. Thanks, Elizabeth.