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Building Friendships Through Building Schools in Ethiopia; Chrysler Filing Chapter 11; President Obama on Auto Industry; No Jobs: A Family Fights Back; Chrysler Filing Chapter 11; Grading the President
Aired April 30, 2009 - 11:58 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: You might be surprised to learn U.S. troops are on the ground in Ethiopia battling terrorism. They are there to build, not fight.
CNN's Barbara Starr has our story of an ADCB (ph) construction team that will impact your world.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): In one of Addis Ababa's poorest Arab neighborhoods, unexpected rock stars - the U.S. military.
Here at this Abadeer (ph) primary school, they helped rebuild the run down school, giving these children, who have little, a real opportunity to learn.
When the troops first got here...
(on camera): What did this school look like when you first got here?
STAFF SGT. BRUCE FRANKS, LEADER, U.S. ARMY CIVIL AFFAIRS: It was very run down. There was mold growing from where the ceilings had been leaking. There was loose, naked wires hanging out, which was a big hazard to the children. And the classrooms in general, there were no chalkboards, there were only one or two desks, and most kids had to either stands up or just sit on floor.
STARR (voice-over): The children had been drinking water from a rusty tank; it was quickly replaced.
All of this part of the U.S. military strategy to fight terrorism without ever firing a shot.
NASSER MAHMUD, HEADMASTER (through translator): We are very lucky and we are very pleased.
STARR (on camera): For the U.S. military, their work here at the Abadeer school and across the Horn of Africa is a long term investment. Helping these children get a chance at a real education means there's less chance that extremism can take hold in this region.
(voice-over): Troops will tell you they love being here. UNIDENTIFIED SOLDIER: It's like planting seeds. We start something small and it'll grow into something greater.
STARR: Already, some of Africa's youngest citizens are big supporter of one man in particular.
(on camera): How many here know who Barack Obama is?
(CHILDREN YELLING & LAUGHTER)
STARR (voice-over): But politics gives way to recess and a chance for soldiers and children to reach out to each other.
Barbara Starr, CNN, Addis Ababa, Ethiopia.
(END VIDEOTAPE)
HARRIS: So you say you want to help? Well, just log on to CNN.com/impactyourworld.
President Obama speaking this hour on the pending Chrysler bankruptcy and the auto industry. He also brought up the issue at last night's news conference.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My goal is to make sure that we've got a strong, viable, competitive auto industry. I think some tough choices are being made.
There's no denying that there's significant hardship involved, particularly for the workers and the families in these communities. And we're going to be coming behind whatever plan is in place to make sure that the federal government is providing as much assistance as we have to ensure that people are landing back on their feet.
(END VIDEO CLIP)
HARRIS: Once a pillar of the big three with GM and Ford, Chrysler now in need of a brace. The company faced a deadline today to reach deal with creditors who had loaned the company about $7 billion. That didn't happen.
Let's evaluate the potential impact with CNN's Christine Romans in New York.
And Christine, tell me why this didn't happen. What happened to this deal?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well you have some creditors, Tony, who decided that they didn't want to take the Treasury's deal. They didn't want to swap out $7 billion of secured debt for a much smaller stake in the new company that's going to emerge. And so, instead of taking 68 percent less, they decided that they were going to move forward here. And frankly, it means that they will go into bankruptcy court, and they can try to make legal trouble for this company, and try to get more than the U.S. Treasury is offering -- Tony.
HARRIS: Well, Christine, is the calculation here from the hedge funds, some of these smaller banks, that they can actually get a better deal in bankruptcy court?
ROMANS: Well, obviously, the calculation is that the deal that the Treasury is offering is not the best deal that they can get. I mean, they must be motivated by economic return, and they must think that they can get a better deal either by causing trouble for this company and getting more out of the bankruptcy court proceedings, or maybe in the eventual liquidation they will get more.
HARRIS: Well, how about this -- a lot of these hedge funds also have interests, stakes, positions in GM, in Ford, and perhaps what they are doing here is weakening this competitor. Chrysler has an uncertain future, so whatever happens to Chrysler happens to Chrysler. And in the process we strengthen our position, our market share for GM and for Ford?.
ROMANS: It's an interesting theory. I don't know who these hedge funds are. I don't have a lit. They are not revealing to me a list of who is specifically causing the trouble from the point of view of the administration.
The administration's point of view on this, though, is these are creditors who are not operating in their own best economic interest as an administration official said earlier today, or in the national interest of the country. So, we'll have to see where we go.
But we do know that -- this is what the White House said this morning. "Their (creditors) failure to act is in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward."
So the position of this administration is that there will be a deal with Fiat, this company is going to go into Chapter 11, it's going to come out, it's going to get more taxpayer funding to keep moving. We're expecting the Canadian officials to have their own press conference in a couple of hours, too, so this is something that will affect Canadian workers and Canadian plants as well.
You know, Tony, it's a big story. But this is a company that has come a long way being the innovator of the minivan and really an American icon. You know, some critics would say it has been hollowed out over the past 10, 15 years, maybe even longer. And so now, this is not the Chrysler we knew in the 1970s and '80s.
HARRIS: Let's do this -- let's bring in another voice to this discussion.
Rebecca Lindland is with us. She was with us, Christine, as you know, yesterday. She is with IHS Global Insight, a business consultancy out of Lexington.
Hey, Rebecca. Good to see you again.
REBECCA LINDLAND, HIS GLOBAL INSIGHT: Hi, Tony. Thanks for having me on again.
Hi, Christine.
HARRIS: Well, what happened here? Why did this deal fall apart? We've been kicking it around with Christine most of the morning.
What's your view?
LINDLAND: Well, you know, the real problem were these three hedge funds and...
HARRIS: Ooh, do you know who they are? Do you know who they are?
LINDLAND: I don't. I don't know who they are, I'm sorry.
HARRIS: OK. All right.
ROMANS: Tony wants to name names.
(CROSSTALK)
LINDLAND: I know. I don't. But what I do know is that their biggest issue is that when they bought this debt, when they brought this on, they were told they were going to be in first position. So that's their first complaint.
HARRIS: Now, tell me what that means. Tell me what that means.
LINDLAND: That means that they would get paid first. And, of course, the federal government is going to get paid first now.
The other issue is that the UAW has been awarded 55 percent equity stake in Chrysler. And these debt holders are saying, wait a minute, that's ridiculous, we deserve more. So you've got Fiat with 25 percent and the government with 20 percent. So the debt holders are saying, hey, we want more of a stake in this than what you've given us.
HARRIS: Now, let me ask you this -- it's my understanding that this debt that these hedge funds and these smaller banks bought into is all securitized.
LINDLAND: Right.
HARRIS: So could these debt holders have actually forced a liquidation? I guess there is potentially a scenario out there where we could be talking not about a Chapter 11 today, but a Chapter 7.
Is that correct?
LINDLAND: Exactly. And that's the big risk. You know, the bankruptcy, this idea that there's a surgical bankruptcy and this is going to be great, as we talked about yesterday, it's all well and good on paper. But if anyone has ever built a house, you know that what you plan on paper with the architect can come out completely different when you go to build that house.
And we are moving into sort of a dark side. Once you go into bankruptcy, as we saw with Lehman Brothers, you can't back out very easily. And you've got to kind of deal with the consequences.
So, even though all these really smart people have put this thing in place, it's still a plan. It is not a reality that Chrysler is going to be able to come out of this bankruptcy in 30, 60, or even 90 days. And the longer it drags on, the worse it is for Chrysler and the consumer.
HARRIS: OK. Rebecca, stay there.
Christine, stay there.
We're going to bring in Eamon Javers now from Politico.
Look at all these voices. Look at all these glares (ph). Boy, this is a rockin' show.
Eamon, I've asked the same question of the all the guests today. I will -- and I'm just getting the two-minute warning to the president's comments.
Eamon, your view on why the deal fell apart, and what are the ramifications of a bankruptcy for Chrysler?
EAMON JAVERS, POLITICO FINANCIAL CORRESPONDENT: Well, clearly, a couple of the creditors decided that they would rather take their chances in court than in negotiations with the Obama administration. That's a high-risk strategy, but this is a high-stakes poker game.
And particularly for the president, as he comes out to address the country about this, we're going to find out exactly what his take is on this. And all morning, senior administrative officials have been at pains to say this is the best possible deal for the taxpayers even though the word "bankruptcy "can be kind of scary. They're at pains to say...
HARRIS: And Eamon, let me stop you because here comes the president.
OBAMA: One month ago, I spoke about some of the problems that have led to the crisis in the auto industry and about what would be required to ensure that General Motors and Chrysler emerge from their current troubles stronger and more competitive.
My team will continue working with General Motors as they strengthen their business plan and move towards restructuring that's consistent with the principles that I've laid out. And today, after consulting with my auto task force, I can report that the necessary steps have been taken to give one of America's most storied automakers, Chrysler, a new lease on life.
This is a company that has a particular claim on our American identity. It's a company founded in the early years of the American automobile industry, a company that helped make the 20th century an American century, and that came to embody, along with the two other members of the big three, the ingenuity, the industriousness, and the indomitable spirit of the American people.
Chrysler has not only been an icon of America's auto industry and a source of pride for generations of American workers; it's been responsible for helping build our middle class, giving countless Americans the chance to provide for their families, sending their kids to college, saving for a secure retirement.
It's what hundreds of thousands of autoworkers, and suppliers, and dealers, and their families rely on to pay their bills in communities across our industrial Midwest and across the country. It's been a pillar of our industrial economy, but, frankly, a pillar that's been weakened by papering over tough problems and avoiding hard choices.
For too long, Chrysler moved too slowly to adapt to the future, designing and building cars that were less popular, less reliable, and less fuel efficient than foreign competitors. That's part of what has brought us to a point where they sought taxpayer assistance.
But, as I've said from the start, we simply cannot keep this company or any company afloat on an endless supply of tax dollars. My job as president is to ensure that, if tax dollars are being put on the line, they are being invested in a real fix that will make Chrysler more competitive.
That's why I rejected the original restructuring plan that Chrysler offered last month. It was clear that if we put tax dollars in that plan, it would be a bad deal for American taxpayers and would not put the company on a viable path.
But it's also clear that, if Chrysler was able to form a partnership with the international car company Fiat, there was a chance Chrysler could have a bright future.
After consulting with my auto task force, industry experts, and financial advisors, I decided to give Chrysler and Fiat 30 days to reach an agreement. The standard I set was high: I challenged them to design a plan that would protect American jobs, American taxpayers, and the future of a great American car company.
But over the past month, seemingly insurmountable obstacles have been overcome. And Chrysler's most important stakeholders, from the United Auto Workers to Chrysler's largest lenders, from its own -- from its former owners to its suppliers, have agreed to make major sacrifices. So, today, I am pleased to announce that Chrysler and Fiat have formed a partnership that has a strong chance of success. It's a partnership that will save more than 30,000 jobs at Chrysler and tens of thousands of jobs at suppliers, dealers, and other businesses that rely on this company. It's a partnership that the federal government will support by making additional loans that are consistent with what I outlined last month.
As part of their agreement, every dime of new taxpayer money will be repaid before Fiat can take a majority ownership stake in Chrysler. In addition, considering Chrysler's extensive operation in Canada, the government of Canada is also committing resources to ensure that Chrysler has a chance to succeed, and we're working closely with them.
It's a partnership that will give Chrysler a chance not only to survive, but to thrive in a global auto industry. Fiat has demonstrated that it can build the clean, fuel-efficient cars that are the future of the industry. And as part of this agreement, Fiat has already agreed to transfer billions of dollars in cutting-edge technology to Chrysler to help them do the same.
Fiat's also committed to working with Chrysler to build new fuel- efficient cars and engines right here in America.
Now, this partnership was only possible because of unprecedented sacrifices on the part of Chrysler's stakeholders, who are willing to give something up so that this company and all the men and women whose livelihoods depend on it might see a better day.
Chrysler's management -- and in particular, its CEO, Robert Nardelli -- have played a positive and constructive role throughout this process. The United Auto Workers, who had already made painful concessions, agreed to further cuts in wages and benefits, cuts that will help Chrysler survive, making it possible for so many workers to keep their jobs and about 170,000 retirees and their families to keep their health care.
Several major financial institutions, led by JPMorgan, agreed to reduce their debt to less than one-third of its face value to help free Chrysler from its crushing obligations.
The German automaker, Daimler, agreed to give up its stake in Chrysler and contribute to the company's pension plan, further easing Chrysler's financial burden.
And countless Americans across our country will be making major sacrifices, as well, as a result of plans to consolidate dealers, brands, and product lines.
Now, while many stakeholders made sacrifices and worked constructively, I have to tell you, some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout.
They were hoping that everybody else would make sacrifices and they would have to make none. Some demanded twice the return that other lenders were getting.
I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars.
I don't stand with those who held out when everybody else is making sacrifices. That's why I'm supporting Chrysler's plans to use our bankruptcy laws to clear away its remaining obligations so the company can get back on its feet and on to a path of success.
Now, no one should be confused about what a bankruptcy process means. This is not a sign of weakness, but rather one more step on a clearly charted path to Chrysler's revival.
Because of the fact that the UAW and many of the banks, the biggest stakeholders in this whole process have already aligned, have already agreed, this process will be quick, it will be efficient. It's designed to deal with those last few holdouts, and it will be controlled.
It will not disrupt the lives of the people who work at Chrysler or live in communities that depend on it. And it will not affect the ability of American consumers to buy a Chrysler or to get it serviced and repaired.
It's a process that has the full support of Chrysler's key stakeholders and the full backing of the United States government. And I have every confidence that Chrysler will emerge from this process stronger and more competitive.
I know that there are some who will insist that bankruptcy, even for these limited purposes, is a step that should not have been taken. But it was unsustainable to let enormous liabilities remain on Chrysler's books, and it was unacceptable to let a small group of speculators endanger Chrysler's future by refusing to sacrifice like everyone else.
So I recognize that the path we're taking is hard, but, as is often the case, the hard path is the right one. The path we're taking also involves steps to shore up financing, because we cannot have viable car companies without strong car financing companies.
It's now clear that Chrysler Financial, the institution that finances Chrysler's cars and dealers, would on its own require an unacceptably large stream of taxpayer money to remain viable. That's something I refuse to provide.
And that is why, as part of this agreement, GMAC, an independent bank-holding company that finances General Motors, has agreed to finance new Chrysler sales. We will be providing additional capital to GMAC to help unlock our frozen credit markets and free up lending so that consumers can get auto loans and dealers can finance their inventories, a measure that will help stabilize not only our auto market, but the broader economy, as well. And tomorrow, the Small Business Administration will be announcing it is expanding eligibility for some loans to include more suppliers and dealers, including RV dealers.
So these are some of the steps that we're taking to make it easier for Americans to buy a car. If you are considering buying a car, I hope it will be an American car. I want to remind you that, if you decide to buy a Chrysler, your warranty will be safe, because it is backed by the United States government.
And to further boost demand for autos, we are working to accelerate the purchase of a federal fleet, and we're also working with Congress on fleet modernization legislation that can provide a credit to consumers who turn in old cars and purchase cleaner, more fuel-efficient cars.
As pleased as I am about today's announcement and about the opportunity Chrysler has to remake itself, we know that far too many Americans and far too many communities are still struggling as a result of layoffs not only at plants that produce cars, but at the businesses that produce the parts that go into them and at the dealers that sell and repair them.
And that's why, as I've discussed the last time we gathered here to talk about autos, I've named Ed Montgomery to be the director of recovery for auto communities and workers. Ed will be traveling to Michigan next week with representatives from all the key government agencies represented here, reaching out to our hardest-hit areas, cutting through red tape, ensuring that the full resources of the federal government are getting to the workers, the families, and communities that need it the most.
Now, these are challenging times for America's auto industry and for the American people, but I am confident that, if we as a nation can act with the same sense of shared sacrifice and shared purpose that's been shown by so many of Chrysler's stakeholders, if we can embrace the idea that we're all in it together, from the union hall to the boardroom to the halls of Congress, then we will succeed not only with Chrysler, we will not only see our American auto industry rise again, but we will rebuild our entire economy and make the 21st century another American century.
We have made great progress. We can make great American cars. Chrysler and GM are going to come back. And I am very confident that we're going to be able to make, once again, the U.S. auto industry the best auto industry in the world.
And I want to thank my entire auto team who worked so diligently on what I consider to be a much better outcome than it looked like we were going to see 30 days ago.
Thank you very much, everybody.
HARRIS: Wow. Wow. Strong stuff there. Where to begin?
Let's get reaction the president's comments on Chrysler. Christine Romans of the CNN Money Team is with us. Politico's financial correspondent, Eamon Javers, joining us from Arlington, Virginia. Senior auto analyst Rebecca Lindland, she is with IHS Global Insight, a business consultancy out of Lexington, Massachusetts. And Allan Chernoff will be joining us shortly from a Chrysler assembly plant in Warren, Michigan.
To the panel.
Wow. Tough language from the president. I want your reaction.
"I don't stand with them," and he's talking about -- Rebecca, you mentioned there was a group of three, right? Is that what you said to us?
LINDLAND: Yes.
HARRIS: Investment funds, hedge funds that held out, and they were blasted by the president. Let me get your reaction.
(CROSSTALK)
LINDLAND: Well, I had to put my glasses on so I could see my notes that I made.
You know, some of the things that he said, certainly, I mean it's very, very clear that he is siding with the unions here. It also sounds like -- he wasn't explicit in this, but it sounds like the agreements that were made will be honored in bankruptcy court, which is something that we've been debating about this morning, whether that would happen or not. So it does sounds like the people that did come to the table are going to be rewarded.
HARRIS: Those four major lenders, correct?
LINDLAND: Right, the four major lenders. Also, the UAW agreement and the CAW, Canadian Auto Workers, agreement would also be honored. So I thought that was an important note. Again, he didn't say it explicitly, but he did imply it.
HARRIS: Wow.
Eamon, your thoughts?
JAVERS: Well, look, this is clearly a showdown here between Barack Obama and the hedge funds.
HARRIS: Are you kidding me? Yes.
JAVERS: And Barack Obama is siding with the workers at Chrysler and the employees there over the hedge fund folks. He's hoping that the politics of that are good for him and that will override Americans' nervousness about the idea of Chrysler, one of the most storied companies in the country's history, going into bankruptcy by saying, hey, I'm not going to allow these hedge funds guys to get away with this here, they're not sacrificing when everybody else is sacrificing.
And clearly, there are echoes here of this AIG bonus controversy, where Americans were so outraged by one group getting sort of a perceived sweetheart deal. He just wasn't willing to allow those hedge fund guys to get a sweetheart deal here, and he's willing to allow Chrysler go into bankruptcy in order to prevent that from happening. Very, very high-stakes stuff here from the president of the United States.
HARRIS: Eamon, you called it a showdown. It felt like a little "High Noon," Gary Cooper moment here.
Christine, what are your thoughts? Your reaction, please.
ROMANS: Well, a couple of things in here that I think are important. The bankruptcy filing could come at any time. You know, a senior administrative official with some remarks that were timed for when the president spoke, so this is what I can tell you that's new here.
We expect that filing from Chrysler in New York federal court. It could be today. It is imminent.
The whole plan here was to save Chrysler's 30,000-plus jobs. There will be no imminent plant closures or job cuts. So Chrysler workers, clearly, for the near term, win out here. They will not be cutting any jobs in the near term, although there could be cost evaluations later on, when Fiat comes in and takes a look at things.
And also, taxpayers must be paid back before Fiat can become a majority stakeholder of this new Chrysler. And that is what senior administration officials are calling it. They're calling it the new Chrysler when they talk about the company outside of bankruptcy.
And they are saying they hope -- no promises, but they hope it will be 30 to 60 days. They are really committed to doing this quickly, except for this small group, as they are painting it, of renegade speculators as hedge funds, people who, by the way, have legal contracts to be paid back...
(CROSSTALK)
ROMANS: These are legal contracts. Except for those people, they think that they have agreement across the board. And a senior administration official saying, you know, they can make a lot of noise, they can try to make legal noise and put up hurdles in the bankruptcy filing, but no judge in his right mind or her right mind would look beyond all of the consensus and all the sacrifices of everybody else and favor a few small investors.
HARRIS: I want to know who they are. I want to know, who are the people that run these funds, these hedge funds, that said, no, not going have this deal?
ROMANS: Well, look, if they're not taking TARP money, some of these other investors probably have TARP money. You know, bailout money on their books. So they kind of have to listen to the Treasury Department.
HARRIS: You read my mind. You so read my mind on that.
ROMANS: But these small hedge funds don't, so they can say we're pure investors and we got into a distressed security because it was risky. And to pay out that risk, we said make sure we're paid back first if this company goes down. And look. You know, now they're...
HARRIS: And didn't they protect themselves by buying these, what, these debt swap, whatever, which essentially protects them in the event of a bankruptcy? They get paid if -- on essentially the insurance policy if and when Chrysler goes into bankruptcy. Am I correct in that?
ROMANS: No, I don't know. Eamon might know better, but I don't know who they are and I don't know what their agreements are or what their contracts look like. I just know the president just said they were a small group of speculators.
HARRIS: Eamon, I bet I'm right on this.
JAVERS: Yes. Well, you know, another thing that we can report now, that senior administration officials told us just before the president spoke -- it was embargoed until after the president's speech -- is that the United States government is actually going to be selecting board members for the newly reconstituted Chrysler, and they say they're going to select people of independent stature.
But the United States government's involvement in Chrysler is not going to end today. This is going to be an ongoing thing for a long time, and we're going to see federal officials packing the board of Chrysler with some of their own selections here.
HARRIS: Well, ,let me thank this panel -- you guys are terrific -- as I bring in Allan Chernoff.
And Allan is at a Chrysler assembly plant in Warren, Michigan.
And Allan, can you hear me OK?
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Yes, I can, Tony. And I can also address that question that you were just talking about.
We have heard, I have heard from some analysts that, indeed, some of those hedge funds actually did have insurance on their bonds. And so they were saying, hey, why should we take any haircut? If we just hold on, our bonds are insured. So, yes, Tony, these were investors who were just out for themselves, wanted to be sure that they got all their money back, according to their insurance contracts, not willing to sacrifice in order to prevent Chrysler from going into bankruptcy.
HARRIS: See there? All right. Vindicated once again.
Thank you, Allan.
Another question for you. I know you had an opportunity to speak with a number of those workers at that plant in Warren, Michigan, before the president's comments. I'm wondering what the reaction is likely to be to the news that the Fiat deal appears to be going forward?
CHERNOFF: Nobody is surprised over here. These are people who only a day ago, voted to give up a lot of what they had gained -- to give up bonuses, give up break time, give up cost of living increases. They are just keeping their heads down, and a number of them have said to us they just want to hold on to their jobs, they want to keep on working, and so they are pleased with what President Obama just announced.
HARRIS: OK. Let me do this, let me thank the panel.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We just ride the train until it crashes.
UNIDENTIFIED MALE: It's sad that it came to this situation. You know, all the years everybody put in, being here, doing everything day by day, building the cars for our future and stuff. Yes, I feel sad about that, but the way the economy is right now, this is going to happen.
(END VIDEO CLIP)
CHERNOFF: Feeling the same way not only in the auto industry, but I think a lot of folks here just saying, look, we're glad to have a job.
Tony, although let's see what happens down the road, because bankruptcy gives a company a tremendous amount of power to restructure. Dealerships, suppliers, a lot of those guys are going to get hit. They will be closed, some of them.
HARRIS: Boy. OK.
Allan Chernoff.
Allan, I appreciate it so much.
And my thanks to this wonderful panel.
Eamon, thank you.
Rebecca, thank you.
Christine, as always, thank you.
Terrific stuff.
All right. Let's get some reaction now from Chrysler dealerships.
CNN Richard Roth is in Larchmont, New York. And Richard, I guess the question that we asked you last hour holds now, particularly after the president's comments. We're wondering, what does a restructuring really mean at the dealership level?
RICHARD ROTH, CNN CORRESPONDENT: Well, you had a panel, I see, of three people. I've got about seven people here. We're going to find out what it means, restructuring.
Richard Ruggiero is a salesman here.
What does this mean, what the president has said, here, at Chrysler dealership, going forward?
RICHARD RUGGIERO, CHRYSLER SALESMAN: It's a momentous occasion. It's showing all the parties that have reached out. Plus our president supporting helping support this product means a lot for the consumer and for Chrysler to get back on our feet and just move on forward for the future of all consumers.
ROTH: Eleanor (ph) is one of the leaders here.
How does it translate though when a customer comes in? How are you going to present this? What are they buying, a Fiat, a Chrysler? What do they need to know?
UNIDENTIFIED FEMALE: Well, it's important to know that we're an operational company and that the merger with Fiat can only strengthen our company and make it more competitive globally and domestically.
ROTH: You and your colleagues here, including your father here, who is the president, Alfredo (ph), were cheering as the president spoke. Why were you applauding? I never hear applause in a car dealership.
UNIDENTIFIED FEMALE: I just think the merger is a positive thing. I think it strengthened us as a company. So I think it's good.
ROTH: Alfredo (ph), you came here in 1956. You've been selling cards in the area for 40 years.
What were your impressions of this youthful American president come to your rescue?
UNIDENTIFIED MALE: Well, looking at the United States president backing up, supporting a merge and a deal, and salvaging one company, an American company, which is Chrysler, and supporting and merging of Fiat, it's only good news and it's a bright future.
ROTH: Good news from the home country where -- from Italy, from Fiat. But, Fernando, what are you seeing? Customers are going to be buying cars? They've got to be hesitant. People have -- are keeping their cars much longer now.
FERNANDO: I see the opposite. I see them coming in now. It's great time incentives. Good time to buy American. And Fiat technology is great. I can't -- I'm so excited to see the parts (ph) coming in soon.
ROTH: Robert, the president was a little upset at hedge funds for holding out for a better deal. Well, that seems also to be the American way. They've see what can happens in these turbulent financial times. What did you think of his criticism on the people who wanted to hold out there?
ROBERT: Well, I agree 100 percent with the president. Everybody else was chipping in and trying to give their part to help Chrysler out and these other companies were trying to take advantage of that situation. And I agree with the president 100 percent. This restructuring bankruptcy, I think, is going to be a very positive note for Chrysler.
ROTH: Estelle, very briefly, tell me, what have you heard from the customers? It says you're a customer service manager.
ESTELLE: Some . . .
ROTH: Honestly.
ESTELLE: Concern. Some concerns. But I believe this is a great infusion for the company and it's going to turn around and we're going to see more clients coming in, buying American. This is a good day for Chrysler.
ROTH: All right. Steve, very briefly, people have been buying Japanese cars it seems. Why should they buy a Chrysler? Give me your best sales pitch in six seconds.
STEVE: We make a great product and we're very customer oriented and we want to continue to do the fine job that we've been doing.
ROTH: And now you're going to have to learn Italian though.
Thank you.
That's the mood here. Very upbeat mood after a lot of bad months.
Tony, back to you.
HARRIS: All right, Richard, appreciate it. Thank you.
Boy, what a morning we have had. And what contributions from everyone on our team, including you watching us from home or wherever you are. This morning we asked for your comments on the Chrysler bankruptcy at our blog at cnn.com/newsroom. And here are a couple.
Laurie says, you know, "it's time to let the auto manufacturers go. They are like the dinosaurs that were unable to adapt to climate change. I feel for all the people whose jobs are being lost, but pumping money into the big car manufacturers wasn't saving jobs anyway." Roy says, "I worked 30 years for Chrysler Jeep Corporation out of Toledo, Ohio. It has come to this -- sad. What is going to happen to my pension and health care?"
And if you would like to comment -- first of all, thanks for those comments. If you'd like to participate, just go to our blog page. I'm not used to this concept of it being my blog. It's our blog page. Our team's blog page. Just go to cnn.com/newsroom.
The H1N1 flu virus is spreading. We will have the latest on what governments are doing.
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HARRIS: And our other big story today, new confirmed cases of swine flu. Here's what we know.
The Center for Disease Control and Prevention has just updated its figures. Now confirming 109 people infected with the virus in 11 U.S. states. A dozen countries are now coping with confirmed cases of what health officials have dubbed H1N1 2009.
The growing numbers prompting the World Health Organization to raise its pandemic alert to faze five. That is the second highest level, indicating a global outbreak of the disease appears imminent and efforts to produce a vaccine will, of course, intensify.
But for the United States, the pandemic level is apparently not very significant.
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DR. RICHARD BESSER, ACTING DIRECTOR, CENTER FOR DISEASE CONTROL: It doesn't really change anything in terms of our approach in this country. We're a country that already is affected by this. And whether it's called a pre-pandemic phase four or five or a pandemic phase -- a true pandemic at six, it doesn't change the aggressive approach we're taking to try and control this in the United States.
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HARRIS: President Obama is urging Americans to take the same precautions they would in any flu situation and he says his administration is prepared to do whatever it takes to respond to the current flu outbreak.
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OBAMA: This is a cause for deep concern, but not panic. And I think that we have to make sure that we recognize that how we respond intelligently, systematically, based on science and what public health officials have to say will determine in large part what happens.
(END VIDEO CLIP)
HARRIS: And you can see more on the swine flu's global impact and learn how to protect yourself from the virus, just check out cnnhealth.com and you can also follow the conversation with us on Twitter. Simply search #cnnswineflu.
A North Carolina family coping with the collapse of the textile industry in our "Money & Main Street" report.
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HARRIS: CNN brings "Money & Main Street" together so you see the hard realities of this economic crisis. Losing a job can be a disaster for any family. But in towns where manufacturers are packing up and moving out, it is especially difficult to find a new job. CNN's Gerri Willis met a family in Spruce Pine, North Carolina, where one out of seven workers is out of a job.
(BEGIN VIDEOTAPE)
KEITH MURDOCK, LAID-OFF WORKER: My job search has filled up about three pages already.
GERRI WILLIS, CNN CORRESPONDENT (voice-over): Like most parents, Vickie and Keith Murdock worry about providing for their family. Keith is unemployed following his second layoff in eight years.
MURDOCK: Everybody you talk to, we want to hire you. We ain't got nothing open right now.
WILLIS: Vickie and Keith met at a textile mill nearly 20 years ago in tiny Spruce Pine, North Carolina. But Keith was laid off when the mill closed in 2001 and Vickie lost another job in 2006 when furniture maker Ethan Allen closed its plant here. Their situation is not unusual in this area.
(on camera): Looks like lentils, maybe.
REV. BILL SWEETSER, SHEPHERD'S STAFF BOARD OF DIRECTORS: We've got salad dressing and some . . .
WILLIS: Orange. Canned fruits.
(voice-over): Workers at the Shepherd's Staff Food Pantry say they are seeing three times as many clients as they did just last year.
SWEETSER: Right now I would say we're barely keeping up.
WILLIS: The community has lost more than 2,000 jobs in the last six years. Major industries, textile, mining, furniture have left the area, but residents are hoping new businesses will help. A growing crafts and tourism industry is adding jobs and the town is hoping to attract retirees looking for second homes. Vickie and Keith both did the right thing. Keith went back to school and retained for a job as an auto body mechanics. Vickie retrained too. She'll graduate as a certified medical assistant in May. But retraining doesn't necessarily guarantee long term employment. MURDOCK: I heard of a place coming in Bernsal (ph) (INAUDIBLE) and I got a job with them. And I loved it. And then here just recently, I got laid off from it in January.
WILLIS: In the mean time, Keith and Vickie keep their spirits up.
VICKIE MURDOCK, UNEMPLOYED: When we get to worrying how are we going to pay for this, it's like the Lord makes a way.
WILLIS: They're hopeful that they'll find new jobs soon and keep their family afloat.
Gerri Willis, CNN, Spruce Pine, North Carolina.
(END VIDEOTAPE)
HARRIS: Vickie and Keith Murdock are making all the right moves, retraining, pounding the pavement and keeping their eyes and ears open for new job possibilities. One bright spot. Their oldest daughter just received word that she will receive a Pell Grant to attend a local community college where she will train as be a nurse.
You can see more "MONEY & MAIN STREET" with Roland Martin tonight at 8:00 p.m. And a new "MONEY & MAIN STREET" every Thursday morning on "AMERICAN MORNING."
Did Chrysler's choice of product lead to the company's downfall?
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HARRIS: Of course you can count on CNN to be your source for money news. And check out cnnmoney.com for the latest financial news and analysis. Chrysler, as you can see here, is the big story today, facing down bankruptcy while planning for a new future with Fiat. That story and more at cnnmoney.com.
Why don't we do this. Let's check out the big board, your stocks, and what investors are -- how they're reacting to the news today of this pending bankruptcy for Chrysler. As you can see, it's pretty flat really. The Dow in positive territory, up 5 points. The Nasdaq up 21. We will follow these numbers throughout the day with Susan Lisovicz -- I'm sorry, Stephanie Elam is in for Susan in the CNN NEWSROOM.
With a Chrysler bankruptcy imminent, here's the question, did an over reliance on trucks and SUVs land it in this mess in the first place? CNNMoney.com's Poppy Harlow has our "Energy Fix" from New York.
Hi, Poppy.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Hey, Tony, yes, it's a big question and, of course, hindsight 20/20. But the truth is, this company, Chrysler, has really lagged in fuel efficiency. That's a factor in what we're seeing happening today. Earlier this hour, the president said for too long Chrysler has moved too slowly to build vehicles as fuel efficient as its competitors. In February, the auto task force said Chrysler will struggle to comply with increasing fuel efficiency standards.
So let's look at the lineup of models that Chrysler has. Of the 22 models Chrysler has, only three of them, Tony, get 30 miles per gallon or more on the highway. That's the Sebring sedan, the Dodge Avenger and the Dodge Caliber.
Now, an auto analyst we spoke with today said the Sebring and the Avenger have been "abject failures in the market." The Caliber has done a little bit better. But fuel efficiency, what we see from this, Tony, is not enough. Americans have to want to buy these cars as well. And the lineup for Chrysler, not too impressive on the fuel efficiency side.
HARRIS: Yes, yes. Well, I have to ask you, will this partnership then with Fiat mean more efficient vehicles?
HARLOW: It is clearly the hope. Fiat's an Italian carmaker that we all know more about now over the past month. Learning more and more about it. It's known for its light weight -- it's fuel efficient cars, like this one. This is a Fiat 500. You probably haven't seen it on the road because it's not in the United States. It's in Europe. Gets about 38 to 40 miles per gallon. Very popular in Europe. Last month, actually, Fiat was the only European auto maker to see its sales grow.
But this is not going to be an instant fix. Analysts say it's going to take between one and three years for these new vehicles to hit showrooms in the United States. Some engineering needs to be changed to meet safety and emission rules. If we do see a deal finalized, the president just said as part of the deal, though, Fiat has agreed to transfer billions of dollars in cutting-edge technology to Chrysler so they can build these more fuel efficient cars.
And important to note, Tony, Fiat has said that those cars will be built in the U.S. in Chrysler factories. The big question, are Americans going to like these cars, are they going to buy them? Because if they don't, it doesn't fix the problem.
HARRIS: Absolutely. Well, sometimes, if you can't come up with the technology yourself, you have to buy it.
HARLOW: Right.
HARRIS: Poppy, appreciate it. Thank you.
HARLOW: Sure.
HARRIS: Are you taking steps to protect yourself from H1N1 2009? Some of our iReporters sure are. And you have got to hear what one young lady is doing.
(COMMERCIAL BREAK) HARRIS: Look, many people are bracing for the worse as the number of swine flu cases continues to climb. Check out CNN iReporter Karen. She's a trip.
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KAREN, CNN IREPORTER: Am I worried about swine flu? Yes, I am. I am prepared. I am ready. I've already stocked up on my food and I got my mask and I got a little money saved up just in case. As soon as the president says the word that we got to stay in, I got my food and my mask and my money and I'm ready.
(END VIDEO CLIP)
HARRIS: OK. I told you.
The report card is in. How are Americans -- how are you grading the president?
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HARRIS: So just want to pass this along to you. I guess this makes it official. Chrysler is reporting that it has, in fact, filed for Chapter 11 restructuring -- bankruptcy. The president really made the announcement at the top of the hour. But Chrysler making it official from its end that it has filed for Chapter 11 restructuring.
Another nugget on the Chrysler story before we go. We've known that Chrysler's CEO, Robert Nardelli was going to leave the company at some point. The open question was, when. The Associated Press is reporting that Nardelli is says that he will leave the company after its emergence from bankruptcy. So a couple of loose ends tied up on the Chrysler story there.
President Obama wrapped up his first 100 days with a prime time news conference last night. In opening remarks he said we're off to a good start. But how are the people grading the new administration? Here's CNN senior political analyst Bill Schneider.
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OBAMA: Please be seated.
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Uh-oh, the report card is out. How's the president doing?
Here's what he says.
OBAMA: I'm proud of what we've achieved but I'm not content. I'm pleased with our progress but I'm not satisfied.
SCHNEIDER: That's what the American people say too. The average grade they give the president after 100 days, B-minus, pretty good. Keep working on that A.
Democrats and Republicans differ in their grades, but not by that much. Democrats give their president a B-plus.
OBAMA: I've got Democrats who don't agree with me on everything. And that's how it should be.
SCHNEIDER: The president says he's trying to be bipartisan.
OBAMA: I do think that to my Republican friends, I want them to realize that me reaching out to them has been genuine.
SCHNEIDER: The Republican response - wary. Republicans give President Obama a C-minus.
Is there a racial divide? Yes, but not because whites are particularly harsh on the nation's first African-American president. Whites give him a C-plus. The president has not shown any particular favoritism toward African-Americans.
OBAMA: I'm confident that that will help the African-American community live out the American dream at the same time as it's helping communities all across the country.
SCHNEIDER: Blacks give President Obama an A minus. That's pride. How does the bad economy affect the president's grades?
Suppose someone in your household has lost a job. How do you grade President Obama? B-minus.
Suppose you're worried that someone in your household will lose their job? B-minus.
And if you're not worried, B-minus?
What does that prove? That people do not hold a president who's been in office only 100 days accountable for their economic woes.
OBAMA: Obviously, I didn't anticipate the worst economic crisis since the Great Depression.
SCHNEIDER (on camera): President Obama's overall grade of B- minus is higher than the grades Americans give him on economic policy and on foreign policy. He gets C's on both subjects.
Bottom line, the president is more popular than his policies.
Bill Schneider, CNN, New York.
(END VIDEOTAPE)
HARRIS: And we are pushing forward with the next hour of CNN NEWSROOM right now with Kyra Phillips.
