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The Auto Industry Crash; Reviving Military Trials; Thousands in Pakistan Flee Fighting; Bailout Bucks for Insurance Giants' GM Closing 1,100 Dealerships Today, More to Come; Usher Honored By Boys and Girls Clubs of America; Cannes Film Festival Underway in France

Aired May 15, 2009 - 10:59   ET

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

TONY HARRIS, CNN ANCHOR: And good morning, everyone. It is Friday, May 15th, and here are the top stories we're following for you in the CNN NEWSROOM.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's a sad day for the dealers that are being closed, for their personnel around the country.

(END VIDEO CLIP)

HARRIS: An auto industry group claims dealership closings will cost 200,000 jobs. Today, GM tells hundreds of showrooms to shut their doors.

President Obama looks ready to announce a New strategy for military trials today. Some terror cases at Guantanamo will go forward.

Civilians finally catch a break in Pakistan's Swat Valley -- a brief window to escape the fighting between government troops and the Taliban.

Good morning, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.

Up front this hour, the auto industry crash. GM today will announce its first round of dealership closings. It comes a day after Chrysler moved to shutter nearly 800.

Our Brooke Baldwin is covering this developing story this morning.

And Brooke, how many GM dealers will get this word today?

BROOKE BALDWIN, CNN CORRESPONDENT: The number today, Tony, 1,100. What a story we're telling here.

Eleven hundred GM dealerships will be told today that their contracts will not be renewed when they expire next year -- 2010 we're talking. Eventually, GM is saying they plan to close a total of 2,600 dealerships. Keep in mind, that is almost half of the 6,200 facilities GM has from coast to coast. And they say suburban dealerships will bear the brunt of the closings announced today. Let's talk now about Chrysler. They are shutting 789 dealerships. That is a quarter of its showrooms. Forty of them are in Michigan, where the auto industry crash has pushed the state's jobless rate well above 12 percent.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's overwhelming. It's devastating. I think of all of the people losing their jobs.

UNIDENTIFIED MALE: Business is closing all around us. The city's broke, the state's broke. Yes, I'm very concerned about our community.

(END VIDEO CLIP)

BALDWIN: Talking more reaction here, the National Automobiles Dealers Association, you can imagine they're in a fighting mood. It organized a fly-in to Capitol Hill this week. Dealers met with members of Congress and the presidential auto task force to make their point.

Take a listen.

(BEGIN VIDEO CLIP)

JOHN MCELENEY, NADA CHAIRMAN: Just the dealerships that are being proposed, 3,400 between General Motors and Chrysler, represents almost 200,000 dealership employees in every community in the country, essentially, small towns, major metropolitan areas. And that doesn't include the ripple effect of people that supply those dealers with oil products and equipment and things of that nature. So it's devastating.

(END VIDEO CLIP)

BALDWIN: A ripple effect. We've been talking about that for a couple months now, Tony. The association says the GM and Chrysler closings will cost not only those 200,000 jobs nationwide, but the city, the state government will lose millions in tax revenues.

You know, we talked to those guys up in Michigan, in Warren, the past couple of months. And they obviously are feeling that in Detroit, but this is a major story affecting everyone nationally. Not just the guys in Motor City.

HARRIS: Yes. And thousands of jobs at the dealership level.

BALDWIN: Absolutely.

HARRIS: OK, Brooke. Appreciate it. Thank you. See you next hour.

BALDWIN: Thank you.

HARRIS: You know, what we want to do now is talk to one of the dealerships targeted for closing.

Gerard Broschart is general manager of ABC Chrysler Jeep in Valley Stream, New York. And Gerard was good enough to join us yesterday after he received the news that his dealership would have to close. He joins me now from Time Warner Center.

And Gerard, good to see you again.

Yesterday, you said you were going to fight this. Is that still your plan today?

GERARD BROSCHART, ABC CHRYSLER JEEP, VALLEY STREAM, NEW YORK: Oh, definitely. Definitely going to fight this.

HARRIS: What's the plan, Gerard?

BROSCHART: Well, we're going to stay on and sell used cars in the meantime. But the thing is, we're the only dealership in a pretty large location now.

There were six dealerships around me in the last three years. They all closed. All the Chrysler/Jeep dealers around there closed.

I'm the only dealership left in this area. From Wantor (ph) to Staten Island, on the south shore, there's just me. I don't know why they decided to close me. What are they going to do with the 5,000 customers that I service?

HARRIS: Yes.

BROSCHART: And you know, I got some other bad news today. Chase Manhattan Bank called up and they said they would not continue accepting my consumer loans, which, you know, how am I supposed to sell the remaining cars if they decide -- you know, just decide that they won't accept my paper? I did nothing wrong.

We owe no money, we have no debt. So this is -- you know, this is a decision that -- it was based on maybe they want to have a bigger dealership in this area.

HARRIS: Well, explain that to us, please, because you hinted at that yesterday, they wanted something bigger, flashier, even?

BROSCHART: Oh, yes. Four years ago they told me that they wanted me out. And, you know, we're in a country that, you know, survival of the fittest.

If we cut salaries, we cut -- we pay our own health insurance, we're a mom and pop store. We're really liked in the community. There was no reason to do this.

You know, this is going to hurt the people. This is all about people. It's not about their grand plans down the road.

HARRIS: Well, you mentioned that another bank has said it won't accept your consumer loans. BROSCHART: Yes.

HARRIS: If you become a used car dealership, which I think I just heard you mention, will this bank accept your...

BROSCHART: No.

HARRIS: No?

BROSCHART: And you know what? With no reason.

I mean, I sell -- since we're not a big advertising dealer, most of the paper that goes through the banks -- and you could check -- is A paper. We have a good relationship with the customers. If we find that the customer is heavily in debt, we don't go about trying to find a bank to take them.

So this is a very disturbing thing from Chase. So I have no idea why they would do this today.

HARRIS: OK. And I know you're going to find out.

Gerard, let me ask you something. I just want to be clear here. What do you say to folks who might say to you you're outdated, you're outmoded, your facilities are lacking amenities? And you know what? It's just time to downside, it's nothing against your personally, but it is just time, the entire industry is changing, you haven't been at the forefront of the change, and because of it, you've got to go?

BROSCHART: Well, I would say, why don't you ask the customers who deal with us? That's the whole thing.

I mean, we're about people. And my customers are important to me.

You know, I spend my life with my customers. I've been doing this for 40 years. I sold nothing but Chryslers, and later on Jeeps.

So, you know, this just really, really hurts because I have, right now, no way out. But I will continue to try to find some way to -- you know, to continue on.

HARRIS: Yes. Gerard, tell us about the meeting with your team yesterday when you told them the news. How tough was it to deliver that news? And what did you hear back from your employees?

BROSCHART: Well, most of the employees that we have, like I said, we -- you know, they're understanding. They're going to stay on. I'm not about to, you know, send everybody away.

You know, I'm still hoping that there might be a consideration when they find out that there's no dealers -- you know, no dealer in the area. So, you know, as of now, I have plans to continue employing them.

HARRIS: Gerard, appreciate it. Thanks for your time again. Appreciate it.

BROSCHART: All right. Thank you very much.

HARRIS: While GM and Chrysler are idling dealerships, Volkswagen is ramping up his operation in Chattanooga, Tennessee.

Yesterday, Volkswagen executives and local officials celebrated the raising of the first walls of a New billion-dollar assembly plant. The plant will create an estimated 2,000 jobs.

Volkswagen plans to build a New mid-sized sedan at the plant. It is expected to turn out 150,000 cars a year starting in 2011.

Communities and individuals are pulling together to get through these difficult times. On our CNN summit "Money & Main Street," Anderson Cooper talked with the mayor of Summit, New Jersey, about how his city is coping.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, "AC 360": Many of your residents work in finance and real estate, nearly 20 percent. How has the town been affected over the last couple of months?

MAYOR JORDAN GLATT, SUMMIT, NEW JERSEY: Well, in September, we were -- I would say our world got a bit rocked. But in the last six weeks, eight weeks, we're seeing a real turnaround in Summit.

Our housing seems to have bottomed out. In fact, we've had more homes sold in the last six weeks than probably in the last six months.

But it's really a sense that the town really had a sense of community that came together in the fall. And what we're seeing is neighbor helping neighbor. But it was, especially last September through December, things were quite concerning here with the collapse of Wall Street.

(END VIDEO CLIP)

HARRIS: If you missed any of last night's CNN money summit, "Money & Main Street," you can see it tomorrow night at 8:00 Eastern.

A brief window to get out of danger -- packing up fast and getting out of the Swat Valley in Pakistan.

(COMMERCIAL BREAK)

(WEATHER REPORT)

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HARRIS: President Obama planning to resume those controversial military trials for some Guantanamo detainees and possibly reigniting tensions within his own party.

CNN correspondent Jill Dougherty joining us live now from the White House.

Good to see you, Jill.

You know, at least some of the White House are saying that these military commissions, as they're called, are going to be different this time around.

Maybe you can explain how.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Right.

Well, the way they'll be different, they say, is with more rights for the defendants. Now, let's back up a little.

Ultimately, they're walking a thin line. I mean, they want to repudiate the Bush policies on these military commissions, but at the same time, they don't want to jeopardize U.S. national security. So, essentially, they're saying that these -- that if they got rid of these military commissions and they had to go to strictly civilian ports, it would be almost impossible to convict people like the Khalid Sheikh Mohammed, the mastermind of 9/11.

So they didn't want these people running around freed in domestic courts. So what they've come up with is this hybrid system -- keep the military commission, but you give more rights to those defendants. And maybe we can talk about those rights.

HARRIS: Yes, let's do that. We've got a full screen here. And talk us through this. That'd be great.

DOUGHERTY: OK. These are like three of the main reasons -- the rights that would be expanded, and they're called due process rights that we have here in domestic courts. OK.

Number one, limit hearsay evidence. Number two, ban evidence that would be gained by cruel treatments, things like waterboarding. And then expand the right, more latitude to pick your lawyer. These are not the full rights people would enjoy in domestic civilian courts, but they are expanded -- Tony.

HARRIS: Yes. And I'm curious, Jill, is this -- we know at the time the president signed the executive order, ordering the closing of -- shutting down of this tribunal system and closing Guantanamo, he also ordered a 120-day review of the entire process.

Is this the first decision to come out of that review? It feels like it.

DOUGHERTY: Well, I think it is from that particular review, but don't forget this week, we had that other decision, that the president reversed that idea of should we or should we not release those photographs of alleged abuse of detainees? And you're seeing kind of the same principle here.

He said, yes, I thought it was a good idea, but we believe that it could jeopardize national security. That argument, he would say, wasn't made sufficiently by the Bush administration, therefore the photographs shouldn't be released.

So you're seeing a pattern here twice this week doing similar things. And it is angering his base, liberals and people who support First Amendment rights and, I should say, ,rights of detainees, et cetera. They're very angry and they say that the military commission should go, period.

HARRIS: Governing is tough.

Jill Dougherty at the White House for us.

Jill, appreciate it. Thank you.

In troubled Pakistan today, a brief window of opportunity. Civilians in the crossfire between government troops and Taliban fighters were given eight hours to flee the northwest region.

Our Reza Sayah is in Islamabad. He tells us about one woman who has opened her home to 50 family members.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN CORRESPONDENT: As the battle rages on between the Taliban and Pakistani troops in the Swat Valley, hundreds of thousands of people have fled, and many of them have come 150 miles away, to the federal capital of Islamabad and here to Rawalpindi.

Now, one thing we can tell you about Pakistanis, they are some of the most loyal people in the world. When their families need help, they always come through. And we're going to show you an example.

This is the home of Amina Bibi (ph). And believe it or not, she's taken in 50 family members, family members who lived in Swat but have fled the area because they thought it was too dangerous. And her home is literally these two rooms. It's this one room here and then another room over there.

Five families totaling 50 people have packed in here. Among the family members are 20 children.

This is one of them. This is Janaid (ph). He's 10 years old. Look how handsome he is.

He left a couple of days ago, walked most of the day with his family, found some transportation. He misses Swat, he says. His favorite thing that he left behind that he misses is a chicken.

Nadya (ph) -- this is Nadya (ph), and she speaks a little bit of English. And she says she misses her English book. And she said she heard some of the fighting. When I asked her if she wants to go back, she said no, because that's how bad it was.

Amina Bibi (ph) is over there. This is her home. And she says she's looking for a place for all of these families to move into, but as long as they need a place to stay, she's going to be there for them. She says she cooks all day to feed all these people, and she feels for them, but she says as long as they need her, she's going the be here for them.

A very humble, but certainly generous woman.

(END VIDEOTAPE)

HARRIS: Wow.

You can learn more about what's happening in Pakistan this Sunday on "GPS." Fareed Zakaria has an exclusive interview with former Pakistan president Pervez Musharraf.

(BEGIN VIDEO CLIP)

PERVEZ MUSHARRAF, FORMER PAKISTANI PRESIDENT: One does get concerned. Where are we headed? What are we doing?

I wish -- as I said, I wish the government well, and that they must handle Pakistan and take it forward, and bring peace and economic development. If that happens, I would be the happiest person doing -- continuing whatever I'm doing.

FAREED ZAKARIA, "FAREED ZAKARIA GPS": But if Pakistan is still in trouble?

MUSHARRAF: If Pakistan is in trouble and if any Pakistani, including myself, if we see that we can do something for it, I don't think -- well, my life is for Pakistan.

ZAKARIA: And if the political party that supported you, the Muslim League, were to ask you to be its leader again, that's possible?

MUSHARRAF: They haven't asked me yet. Let them ask me first, then I'll reply.

(END VIDEO CLIP)

HARRIS: Hear more of this exclusive conversation between Fareed Zakaria and Pervez Musharraf Sunday on "GPS." That's at 1:00 Eastern.

If you need to buy a major appliance this year, should you go green? Just one of the viewer e-mails our Personal Finance Editor Gerri Willis answers right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: OK. You've got questions about your money, your investments, your home. And Personal Finance Editor Gerri Willis has some answers, and she joins us live from New York to tackle some of your e-mail questions.

Good Friday to you, Gerri. Good to see you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Tony, Tony, Tony, hello there. Happy Friday.

HARRIS: Thank you, Gerri.

You ready to dive in here?

WILLIS: Yes.

HARRIS: All right.

The first question comes from Floyd in Florida, who writes, "My air conditioner is on its last leg. If I upgrade to a more efficient unit, is there a government rebate or anything else out there for me?"

WILLIS: Well, Floyd, you will get a tax credit up to $1,500 if you're replacing a central air conditioner. The new unit has to meet certain criteria. Go to the Alliance to Save Energy Web site at ASE.org/taxcredits to find out more details.

But you know what, Tony? If you're just replacing a window air conditioner, sadly, there is no tax credit for that.

HARRIS: Yes, I didn't think so.

This next question comes from Fred. And Fred's in Ohio and he really needs your help on this one, Gerri.

"I am a 36-year-old deputy sheriff about to get laid off. What can I do to get ready for this layoff if it, in fact, happens. Is there any way to get some help to go back to school and lower my interest rate on our home loan? We also, Gerri, owe about $13,000 in credit card debt."

WILLIS: Fred, there's a lot going on there. OK. All right. Well, here's some things you can do.

First of all, get on the phone with your mortgage lender and let them know about your change in circumstances. You may be able to negotiate with them to delay or postpone your monthly mortgage bill.

Then, call the credit card company to ask for hardship programs. They're not really advertised, but they can lower your rate, or you may be put on a payment plan.

Now, if you're having trouble getting them to the negotiation table, consider asking an accredited credit counselor. Go to the National Foundation for Credit Counseling. Their Web site: nfcc.org.

And you know what? You can retrain and you can do it cheap.

Go to careervoyages.gov, look into your local community colleges, too, to see what kind of classes they offer. And as you look for that next job, pare down the expenses as you can. Start looking at ways you can bring in some kind of money.

Crack open a CD if you have one to get some emergency money flowing. You know, you've got to batten down all hatches when you lose a job and you lose an income. You've got to make sure you're only spending what you absolutely have to. HARRIS: You know, we've got a question on CDs. Our last question, actually. "How do I buy CDs, Gerri?"

WILLIS: Easy. OK, Certificates of Deposit, let's talk about what that is first.

It's a type of account that pays a fixed interest rate if you agree to leave your money in that account for a certain period of time. You can buy CDs that mature in a month, and five years, 10 years. If you take your money out before the maturity date, you have to pay a penalty.

All right. To get the most of your money, choose a CD that pays a high rate of interest. Check rates at your local bank or go to places like bankrate.com to find the highest yielding rates. Then just apply online or fill out an application at a local bank -- Tony.

HARRIS: Nice. You do such a terrific job for us every day here, but I want everyone to watch your weekend show, because that's terrific.

"YOUR BOTTOM LINE," tee it up for us, Gerri.

WILLIS: 9:30 a.m., right here on CNN.

You know, Tony, a lot of people out there, they're trying to talk to their banker. They want a new mortgage, they want to refi, they can't get anybody to pick up the telephone.

We're going to tell you just how to do that.

And also, dealing with the tough times. You know, it's tough, it's stressful. How do you deal with all of those emotions that are raging through you, your family?

We'll tell you how to put it into perspective.

Plus, improving your credit score. We all want to do that, right, Tony?

HARRIS: Isn't that the truth?

Gerri, "YOUR BOTTOM LINE" this weekend.

You have a great weekend. Good to see you, Gerri. Thanks.

WILLIS: You too, sir. Thank you.

HARRIS: So, you still need ways to save money? I hear you loud and clear.

Just click on CNNMoney.com, and read the 11 tips to save. Again, that's at CNNMoney.com.

(COMMERCIAL BREAK) HARRIS: The government preparing to give billions more of your tax dollars to big businesses. This time the multibillion dollar lifeline is for six major life insurance companies. Here's the list, Allstate - yes, Allstate - Ameriprise Financial, Hartford Financial Services Group, Lincoln National Corporation, Principal Financial and Prudential. The bailout money coming from TARP, the Troubled Asset Relief Program designed to buy toxic loans from banks.

Shoe and apparel maker Nike is be cutting 1,750 jobs worldwide. About 500 positions will be lost at Nike's world headquarters in suburban Portland, Oregon.

Beaverton's mayor worries about the ripple effect on the community's economy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: All I can say is we're going to try and work with Nike to see if we can't find additional employment in the city or the area, because we don't want the families to move.

(END VIDEO CLIP)

HARRIS: Well, layoffs will be completed in a few weeks. Nike has 35,000 workers worldwide. The layoffs amount to five percent of its workforce.

You know, Nike employees aren't the only ones facing a possible pink slip. Skads of people who work at General Motors dealerships may soon be out of a job. Susan Lisovicz up at the New York Stock Exchange with details.

And Susan, these are difficult days for the American auto industry as it struggles to remake itself.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Tony, I think this is a new dimension in the tragedy involving Detroit. You know, a lot of us don't know necessarily a member of the UAW or the salaried worker at one of the big three automakers, but I think all of us know somebody in a local car dealership. And we're seeing a one-two punch.

All across the country, GM, today, notifying 1,100 of the 6,000 dealers that it's terminating their contract, marking the first step in eventually cutting 2,400 dealerships or about 40 percent of its national network. Dealers are being told their contracts will not be renewed in October of next year. Many will likely close shop sooner. By next year, GM hopes to have its network down to just about 3,600 showrooms.

And of course, Tony, this comes just one day after Chrysler announced plans to shut down 800 of its dealerships. That was a very memorable interview you did yesterday with that Chrysler dealership. I think it was only Long Island. The gentleman had been there many, many years. Says he was making money, selling cars.

But what you're seeing, Tony, is these companies are being reshaped to be much smaller companies. GM, for instance, getting rid of Pontiac and Saturn and Saab and Hummer. So they don't need as big of an infrastructure.

GM shares, by the way, are down 1.75 percent. You know what that relates to -- translates into, one cent, Tony, one cent. It's trading at $1.14 a share.

The broader market's kind of mixed right now. The Dow and Nasdaq are up, the S&P 500 is down, but just so slightly, Tony.

HARRIS: Well, that interview you're talking about with Gerard Broschart, he was back on the program this morning, Susan. He says he's going to try to hang in there. He's going to try to fight it, first of all. And then, as he's doing that, he's going to try to remake himself as a used car dealership, but he had word this morning that one of his major bankers will not accept his loans, his consumer loans. So he's - rock and hard place altogether.

But I'm wondering -- in light of all of this, why do these dealership cuts need to be so dramatic, Susan?

LISOVICZ?: Well, you know, Gerard, I think it was, he may be an aberration. A lot of these decisions were based on how much money they were making, and these dealers aren't making enough to stay profitable. And what happens is, you have dealers cannibalizing each other. Of course, the dealers dispute that.

In contrast, you know, you have Toyota, which has been hit in this recession, as well. But other overseas companies have far fewer dealers here, giving them a better chance of pulling in higher sales, Tony.

HARRIS: Wow. All right, Susan, appreciate it. See you next hour, thank you.

LISOVICZ: You're welcome.

HARRIS: Like the auto industry, the real estate market has been hammered by the recession. During our special "CNN MONEY SUMMIT: MONEY & MAIN STREET," Anderson Cooper talked with a California realtor about what the market is like now.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN ANCHOR: What kind of people are able to buy houses from you right now in the area?

RACHEL MORALES, REALTOR: Right now, it's a variety of buyers. With the programs that are out right now, especially FHA, that Shane and Kathy were able to utilize, you know, they do have programs that only require 3.5 percent down. So the programs are there for first- time home buyers. The criteria isn't as strict as some people may think. A lot of people have the preconceived idea of needing 20 percent down.

But, you know, the only setback I can say is that you do need to have two years of tax returns. And if you've just, you know, recently got a job, you know if you lost one, then that can definitely be a setback.

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HARRIS: So if you missed any of last night's "CNN MONEY SUMMIT: MONEY& MAIN STREET," you can see it tomorrow night at 8:00 Eastern.

Some Los Angeles teachers on the picket lines today. They are demonstrating to protest budget cuttings and potential layoffs. The teachers are also planning a rally after school outside district headquarters. Now, earlier this week a judge issued a restraining order prohibiting them from holding a one-day strike.

And we have this programming note: President Obama delivers the commencement address at the University of Notre Dame Sunday. CNN will bring that to you live at 2:00 p.m. Eastern, that's 11:00 Pacific.

A mission to Hubble, a couple of hard-working astronauts named "Mike" are tinkering with the world's most famous telescope right now.

Are these live pictures?

Live pictures from the shuttle's payload bay where Hubble is parked. Pretty cool, huh?

The Atlantis astronauts are on the second of five spacewalks. Today, Hubble is getting six new gyroscopes they hope the telescope points in the right direction. They've already swapped out Hubble's old camera. They will bring it back to the Earth for display at the Smithsonian.

Rob Marciano is in the Severe Weather Center for us.

(WEATHER REPORT)

HARRIS: Time for me to come clean a little bit. My team has been working on my blog. I have a blog for the past few weeks. Translation here, they've been doing all the work. OK, so today, after the show, I will actually write my own blog. Fanfare, nothing?

OK, so watch this space, right. There's the address, watch the space, there will be something.

The topic, to be determined. I wouldn't tell you now, I want you to watch this space. Our show producers want to know what I'm going to blog about today, but I'm not telling them either. They, too, have to watch the space. I will be -- there you go, watch the space.

Back to me now. Back to T. Harris.

I will be writing throughout the weekend. So watch the space. In fact, we're going to build a countdown clock. CNN.com/newsroom, click on T. Harris and watch the space.

It's your town, but do you know what it does? Usher, yes, Usher with Betty and they're talking about Boys and Girls Clubs.

That's next in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: New films from directors Francis Ford Coppola and Quentin Tarantino, just some of the movies generating a lot of buzz at the Cannes Film Festival in the south of France.

CNN's Natasha Curry is there.

(BEGIN VIDEOTAPE)

NATASHA CURRY, CNN CORRESPONDENT (on camera): The excitement is building as thousands of people flock here to the French Rivera for the 62nd Annual Cannes Film Festival.

(voice-over): And the festival got underway with the filmmakers of Disney's "Up" walking the famed red carpet. And it's making history, becoming the first animated film ever to kick off the festival. And Disney is going all out with promotion with this giant balloon-filled photo op. Didn't get off the ground, though, because of high winds.

And director Francis Coppola, his latest film "Tetro," it's all the buzz in Cannes. It was shot in Argentina, mostly in black and white. And he told me that the film was very personal and an emotional film for him that draws on his own personal experience.

FRANCIS FORD COPPOLA, DIRECTOR, "TETRO": My own father was quite a wonderful man. And, you know, and my brothers great and I always idolized him and looked up to him, which is partly what the story's about. But none of the particulars of the stories are real, it's all fiction. But the feeling behind it is very personal. And partly, I was writing it to understand myself, how I felt about all those things.

CURRY (on camera): And some of the world's biggest stars will be here, including Brad Pitt who stars in the latest Quentin Tarantino film, "Inglourious Basterds."

(VIDEO CLIP, "INGLOURIOUS BASTERDS")

BRAD PITT, ACTOR, PORTRAYING "LT. ALDO RAINE": My name is Lieutenant Aldo Raine and I need me eight soldiers.

CURRY: And Penelope Cruz has a film here, too. She'll be walking up the steps of the Palae (ph).

Reporting from the 62nd Annual Cannes Film Festival, Natasha Curry, CNN.

(END VIDEOTAPE) HARRIS: And we'll be bringing you more reports throughout the Cannes Film Festival, plus you can log on to CNN.com/entertainment for in depth coverage.

And that's that singer Ursher...

BETTY NGUYEN, CNN CORRESPONDENT: Usher.

HARRIS: Usher.

NGYUEN: Well, they do say Ursher in the south.

HARRIS: On a couple of the songs right?

NGYUEN: Yes.

HARRIS: All right, Grammy winner Usher lending his voice and star power to the Boys and Girls Club of America. He has just been inducted into the group's hall of fame. Wow.

Betty is here spending time with Usher.

NGYUEN: You want to say, "Ursher" don't you?

It was great. You probably know this, but a lot of people may not. He got his start at such an early age, 15 years old when he dropped his first album. Since then, he has won five Grammys, sold millions upon millions of records and he credits much of his success to his mother.

But he also is very quick to point out the Boys and Girls Club of America provided him with a positive environment as a kid. The Highland Park Boys Club in Chattanooga, Tennessee, is a place that really provided him motivation, also helped cultivate his talents.

And growing up in a single-parent home, Usher says his life could have been much different today if it weren't for the support he gained from that positive environment.

(BEGIN VIDEO CLIP)

USHER RAYMOND, R&B STAR: I didn't have a father as a child, so I definitely was, you know, in a position where I could have been influenced to go and be in a gang. You know, I was little. So I knew I need to find a way to protect myself. Well, protection was being in a gang. Protection could have been any of those things, you know, survival. A lot of kids are trying to survive out here, you know?

But, you know, if there's a way to get a child in a positive direction, I think that we, as parents - we, as parents, have to be very open minded. And the Boys and Girls Club, they gave me that opportunity. And I'm blessed to have made it through it.

(END VIDEO CLIP)

NGYUEN: Yes, he is. And Usher's role now is to be that positive force in the lives of his two young boys.

He's also paying it forward, as he calls it, by helping young people explore the sports and entertainment industries through his new look foundation. And his contribution to young people is a large part of why he was inducted into the Boys and Girls Club Hall of Fame last night. And Tony, he joins the ranks of other hall of famers like Denzel Washington, Muhammad Ali, Bill Clinton and the singer Ashanti.

HARRIS: Yes, yes, yes. Isn't he also working on preventing malaria?

NGYUEN: Yes, with the UN, Nothing But Nets campaign. That is something that's near and dear to his heart. And he is working on that and urging everybody with the Nothing But Nets campaign -- it only cost $10 to buy a mosquito net, and that is so very important to preventing this disease, which is incurable or can be.

HARRIS: Absolutely.

NGYUEN: But coming up this weekend, a lot on tap. I know you'll be watching.

HARRIS: Of course, I will.

NGYUEN: Along with Usher, he talks not only about the Nothing But Nets campaign, his music career, the new album he's going to be dropping a little bit later this year.

But we also talked with someone you're familiar with, Bob Barker. Remember him from "The Price is Right"? Oh, yes. We've got him along with Usher. And the thing about Bob Barker is this, did you know he trained in martial arts with Chuck Norris?

HARRIS: Really?

NGYUEN: That's how he spanked Adam Sandler in "Happy Gilmore," remember that?

HARRIS: That was good. That was a great scene.

NGYUEN: And the other thing about Bob Barker that you folks may not know, he was actually offered a role in a porn flick.

HARRIS: Excuse me?

NGYUEN: Yes, a porn movie.

HARRIS: You going to talk to him about it?

NGYUEN: Yes, we talked to him about it. And find out why the price is not right for that one.

HARRIS: That's good. Thank you, Betty.

NGYUEN: Good to see you.

HARRIS: See you this weekend. All right.

Still to come in the NEWSROOM, Karl Rove answering questions about fired U.S. prosecutors.

(COMMERCIAL BREAK)

HARRIS: Karl Rove gets a grilling today. The former political point man for President Bush is being interviewed by prosecutors looking into the firing of nine U.S. Attorneys in 2006.

Our Jeanne Meserve has more.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Karl Rove didn't have any comment for the cameras this morning about his interview with special prosecutor Nora Dannehy. She's investigating whether any former White House or Justice Department officials broke any laws in connection with the firings of the nine U.S. attorneys. Did they lie? Was there obstruction of justice?

When the dismissals took place, administration officials cited performance issues, but the Justice Department's inspector general and Office of Professional Responsibility concluded there were improper political motivations in some of those firings. Their investigation had gaps because they did not have the authority to compel Rove or any other Bush administration officials to testify. So they recommended a criminal probe and Dannehy was a appointed to conduct it.

Rove attorney's only comment today is that Rove has said he will cooperate fully with the investigation.

Jeanne Meserve, CNN, Washington.

(END VIDEO CLIP)

HARRIS: And earlier on CNN's "AMERICAN MORNING," one of those fired attorneys spoke with our Kiran Chetry. She asked Bud Cummins, should Rove be prosecuted?

(BEGIN VIDEO CLIP)

KIRAN CHETRY, CNN ANCHOR, "AMERICAN MORNING": A lot of legal analyst say that your case really has the clearest link to Karl Rove and as we said, he's going to be testifying about this today or giving, you know, statements about this today. You were fired so, basically, a protege of Rove's, Timothy Griffin, a 37-year-old former RBC opposition research director, could take your position.

BUD CUMMINS, FORMER U.S. ATTORNEY: Right.

CHETRY: Do you think that there should be some consequences? Do you think Rove should face consequences for that?

CUMMINS: Not really. I mean, I think he already has. I think that it's been proven that probably been an unwise decision. It was -- even if it was an OK decision, it was handled incredibly poorly and unprofessionally by the Department of Justice by Kyle Sampson and other managers at the Department of Justice. And I think there's been ample embarrassment all around for everybody involved.

So, in my case, I don't know that there's any other consequences indicated. I don't think any crimes were committed in my case. Now, in n other cases that's still an open question.

(END VIDEO CLIP)

HARRIS: Bud Cummins is the former U.S. attorney for the eastern district of Arkansas.

The auto industry on the skids. Next hour we'll bring you more on General Motors ordering dealerships to shut their doors. I will be joined live by the CNN Money Team.

Plus, an alarming number of kids being killed in Chicago. Youth violence on the rise, it is part of our, "What Matters" segment you don't want to miss.

(COMMERCIAL BREAK)

HARRIS: Boy, more and more people are filing for bankruptcy, but as we hear from Carol Costello the shame of going bankrupt isn't what it used to be.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): Seems everybody is doing it. Bankruptcy, once something so shameful you didn't even mention it, today many consider it a well-deserved out.

(VIDEO CLIP, "THE DREW CAREY SHOW")

DREW CAREY, COMEDIAN: I declare bankruptcy. See, for once, I'm using the system instead of the system using me.

COSTELLO: It turns out comedian Drew Carey was prescient. Many Americans including Matthew Swift can understand where Drew was coming from. Last year he lost his job. Unable to work with his mortgage company and in danger of foreclosure, he used the system and filed for Chapter 7.

MATTHEW SWIFT, FILED FOR CHAPTER 7: What that did was kind of throw a monkey wrench in the process. It kind of gave us time, much- needed time to, you know, find employment.

DR. JOY BROWNE, PSYCHOLOGIST: They were talking about the b- word.

COSTELLO: Psychologist Dr. Joy Browne, who hosts her own radio show, says bankruptcy has become what divorce used to be.

BROWNE: You know, our parents' generation, our grandparents' generation, divorce was shameful. And then everybody started doing it. And it really did take most of the sort of sting out of it and I suppose cool factor. It's much cooler to be divorced than married - not.

COSTELLO: Not is right because bankruptcy kills your credit rating for years, makes it harder to get a job, and it doesn't mean all your debts go away. Yet bankruptcy filings in April were up 36 percent from a year ago. The American Bankruptcy Institute expects more than 1.4 million people will file for bankruptcy in 2009.

NANCY RYAN, BANKRUPTCY ATTORNEY: Oh, my God. It's rising exponentially.

COSTELLO: Nancy Ryan is one extremely busy bankruptcy lawyer. She doesn't see a lot of shame either these days. What she does see is anger. Many of her clients are in Matthew Swift's boat with mortgage lenders who refuse to help refinance their loans. RYAN: They feel, well, I did everything I can. If they won't work with me, well, then they deserve for me to just file bankruptcy on them and not pay back for my house.

(END VIDEOTAPE)

HARRIS: A bankruptcy filing stays on your credit report anywhere from seven to 10 years. Just something to think about.