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Chrysler Shutting 789 Showrooms; The Auto Industry Crash; Military Trials to Resume for Guantanamo Terror Suspects; GM Announces Dealership Closings; Reviving Military Trials; Little Bakery That Could; The Help Desk; Roller Derby Fitness
Aired May 15, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: At this hour, GM is outlining plans to close more than 1,000 dealerships in a conference call with reporters. The CNN Money team is monitoring it. We will check in a little later.
For now we, can tell you GM told 1,100 franchises today their contracts will not be renewed next year. GM plans to close another 1,500 dealerships nationwide for a total of 2,600. It currently operates 6,200 showrooms.
The dealership shutdowns are part of GM's scramble to restructure before June 1st. If it doesn't meet the deadline, the company will be forced to restructure in bankruptcy. GM's top executive has called the chances of Chapter 11 probable.
Chrysler, already in bankruptcy, is shedding a quarter of its dealerships, 789 to be exact.
Our Mary Snow talks with two men who will soon be out of business.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): For brothers Rob and Rick Engel, a business that took 22 years to build unraveled within minutes when they got a phone call and letter telling them it was over for their two Chrysler car dealerships.
ROB ENGEL, CHRYSLER DEALER: I'm very upset. Shock, no doubt anger may set in. It's a decision that is, for us, very illogical.
SNOW: The Engels expected one but not both of their dealerships to be on the cutting block. They say they have been profitable through the economic downturn. And while they plan to appeal, they don't know what comes next.
RICK ENGEL, CHRYSLER DEALER: People ask us what we do for a living. And we don't say that we own a car dealership. We say that we are car dealers. So it's a little bit of a difference.
This is our life. It's all I know.
ROB ENGEL: It's our identity.
SNOW: Their father escaped the Nazis, joined the British Army, and was trained to fix tanks and jeeps. He got into the car business, and his sons followed suit, owning two dealerships, employing 60 people. Some have been here from the start.
Throughout the day, they delivered the grim news to workers. As they did, other dealers were in Washington pleading with lawmakers for help.
JOHN MCELENEY, NADA CHAIRMAN: We understand there's going to be a consolidation of dealers. We just think the process needs to be slowed down.
SNOW: Chrysler, which detailed its plan in bankruptcy court, blamed the unprecedented decline in the industry, saying it plans to make the action final on June 9th. And along with jobs lost, communities like Wyckoff, New Jersey, will feel the effects of dealerships no longer sponsoring local teams, charities and businesses.
RICK ENGEL: We're consistently asked by local groups, whether it's a local Boy Scout who's putting together a project and needs $50 to...
ROB ENGEL: To something larger.
RICK ENGEL: ... something larger.
ROB ENGEL: ... Cystic Fibrosis or...
RICK ENGEL: Leukemia.
ROB ENGEL: ... Leukemia, or any of these things that we support.
SNOW (on camera): And this dealership has made its mark on this community. It's been here since 1988. And for many of these small towns, losing these dealerships could also mean losing their biggest employers.
Mary Snow, CNN, Wyckoff, New Jersey.
(END VIDEOTAPE)
HARRIS: We've talked to other Chrysler dealers. Shock and disbelief seem to be universal. You know, just last hour, I spoke with Gerard Broschart, general manager of ABC Chrysler-Jeep on Long Island.
(BEGIN VIDEO CLIP)
GERARD BROSCHART, GENERAL MANAGER, ABC CHRYSLER-JEEP: 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.
(END VIDEO CLIP)
HARRIS: You know, 40 of the dealerships that Chrysler will close are located in Michigan. This owner found out his business in Southfield is not one of them.
(BEGIN VIDEO CLIP)
DAN FROST, SOUTHFIELD CHRYSLER-JEEP, SOUTHFIELD MICHIGAN: It's sad for the people that are leaving, but in the end it will make the customer stronger, it will make each individual dealer stronger, and it will make our corporation much stronger.
(END VIDEO CLIP)
HARRIS: The National Automobile Dealers Association says that GM and Chrysler closings will cost 200,000 jobs nationwide. For some communities already hit hard by the recession, the news is like a punch in the gut.
Auto analyst, one of our favorites, Lauren Fix, joining me now from Buffalo.
Lauren, great to see you.
LAUREN FIX, AUTO ANALYST: Great to see you, too.
HARRIS: And good Friday.
You know, these closing of dealerships, what do you think here, a painful but necessary realignment?
FIX: Well, I think for a long time they've been trying to pare down some of these dealers. And, you know, if you've got a dealership that came from your family, the last thing you're going to want to do is close it down when your grandfather started it. And besides, it's what you live off of, it's what you do for a living.
I mean, there are actually schools that teach you how to run dealerships. The last thing you're going to do is close it down because the manufacturer doesn't want you to be flashy.
HARRIS: Lauren, you know how we push here.
FIX: Yes.
HARRIS: You didn't answer the question. Painful but necessary?
FIX: Yes, it's painful but necessary. I'm sorry, because I really feel bad because it's going to hurt everyone.
It's going to cost hundreds of thousands of jobs once GM puts out their 1,000 to 1,200 different dealerships that are going to close. It's going to cost people in taxes. It's going to affect radio and TV stations. It's going to affect community services, it's going to affect jobs, and it's going to impact the whole economy.
HARRIS: Yes. OK. So, as you just mentioned, companies have wanted to consolidate dealerships for some time now. But my understanding is that state regs made it very difficult to do this. And bankruptcy makes it a bit easier to realign.
And so here's the question. Does the ability to realign dealerships make it more likely that GM will enter bankruptcy protection? What's your thought?
FIX: I'm going to be totally honest with you. I believe that, unfortunately, General Motors really -- Fritz Henderson isn't making the final decision. I think our lovely automotive task group is making the decision. And they're going to push them into bankruptcy, because even with cutting of these dealerships and everything else, I think we're going to be in a position where General Motors is trying their best to keep three or four brands alive.
Even with selling off brands, they're going to find themselves in the position where they're going to have to go bankrupt. It's the only way it's going to happen, because with all these lenders and all these borrowers, everyone, the consumer is not buying cars. Even with this Cash for Clunkers thing, which I'm absolutely against, consumers are not all going to buy American cars, and that's what the government needs to wake up and realize.
HARRIS: Did I hear you say rather sarcastically, the lovely auto task force? You don't like what's going on here?
FIX: I've never liked that. I've said since day one on CNN, I'm not a fan of the car czar or their task group. There is not one person on that task group that has worked in this auto industry.
And if you talk to the many talented people that are out there from every aspect of production, marketing, advertising, sales, nobody on that board actually has worked in the auto industry, has actually asked what consumers want. And as you've been putting on all day long, and I've been watching, people don't want these little tiny green cars. They want what they need, and that may not be the answer...
(CROSSTALK)
HARRIS: But they're not going to be available. You see where this is going.
The train is on the track. It has left the barn. I'm mixing metaphors here. But you know where we're going. Those big vehicles are not going to be available in three, four, maybe five years.
FIX: Well, if you've got a work business, if you do brick-laying or flooring or you own a construction company, you need a truck. And you can't haul anything...
(CROSSTALK)
HARRIS: Oh, Lauren, you know you will be able to find a truck. But you know what I'm talking about, these SUVs.
FIX: I'm talking about a half-ton truck, some big working trucks. But for the rest of us, if you've got five kids, you can't get them all in a Prius very comfortably.
HARRIS: Well, that's true.
Hey, talking about the dealerships and the closings of these dealerships, are the dealers going to be on the hook for whatever inventory is left here?
FIX: Well, in the Chrysler case what they are doing which I find really not fair to the Chrysler dealers that are closing, the 789 dealers, they're going to be connected with dealers that are within their area to purchase their parts, inventory and tooling. For the General Motors people, we don't know yet. And there's not going to be a list, from what I have been told.
Currently, there is a conference going on with Mark Lanade (ph), and I don't believe they're going to release that list because they're going to try and communicate with these people. We do know that about 500 dealers will disappear by attrition, but the other 1,000 to 1,200, they may just eliminate their franchise agreement, which has always been the issue because there's laws in place.
HARRIS: Right. Lauren, as always, appreciate the give and take.
Lauren Fix for us.
Lauren, thanks. Have a great weekend. FIX: Thank you. You too.
HARRIS: Military trials will resume for some terror suspects at Guantanamo Bay, but the Obama administration is saying the new military commissions will be different from the widely criticized Bush-era tribunals.
OK. Let's go live now to CNN Foreign Affairs Correspondent Jill Dougherty at the White House to help us explain all of this.
And Jill, the president, as we all remember strongly, criticized these military commissions during the election campaign. So why not just get rid of it?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: That is an excellent question. In fact, you know, some people would really make that argument, that why should you have two systems of justice?
And the essential question is, how do you treat these people, Khalid Sheikh Mohammed, who was one of the ring leaders, the spearhead of the 9/11 attacks? How do you treat them? Should they get the same rights that people in civilian courts in the United States get? Now, under the Bush administration, they said no.
Now, as the president stopped this system, temporarily, put it on hold, said let's study it. And what he's coming up with is kind of a hybrid system.
He's not going as far as to say that they would shut them down, because he thinks that there are national security implications. It would be dangerous for national security. But he wants more rights because, after all, eliminating rights or restricting rights is not the American way of justice. So what he's got is this hybrid system where they keep the military commissions but they give the defendants more rights.
HARRIS: OK.
Jill Dougherty at the White House for us.
Jill, appreciate it. Thank you.
House Speaker Nancy Pelosi under increasing fire over what she knew about the Bush administration's harsh interrogation tactics. Pelosi insists the CIA mislead her on what was being done back in 2002.
The top Republican on the Senate Intelligence Committee calls that accusation a massive attack on the intelligence community. Senator Kit Bond says he reviewed the CIA's material, and it was clear Pelosi had been informed about the enhanced interrogation method, but Bond was not present when the CIA briefed Pelosi.
Federal prosecutors want to know just what did Karl Rove know? The former political point man for President Bush is being interviewed today. Prosecutors are trying to determine if any laws were broken in connection with the firing of eight U.S. attorneys back in 2006. The Justice Department already had concluded there were improper political consideration in some of the dismissals.
As we look at what matters in our world, young people in Chicago are being killed at an alarming rate. What are community leaders doing about it?
(COMMERCIAL BREAK)
HARRIS: In our new series, "What Matters," we are partnering with "Essence" magazine to look at African-American issues that matter to everyone. We start with cuts to higher education.
Leaders of historically black colleges and universities say they're losing a lifeline. President Obama's education budget cuts out more than $70 million in aid to black schools. Although black colleges and universities make up only three percent of U.S. colleges, they account for nearly 20 percent of undergraduate degrees awarded to African-Americans.
At least seven former employees of the community group ACORN are being charged with voter registration fraud. Workers in Pennsylvania and Nevada allegedly forged voter registration cards to meet a quota of 20 new voters a day in the weeks leading up to the presidential election. A chief organizer for ACORN tells "Essence" magazine the group did nothing wrong and dismissed the workers as a few bad apples.
For more, pick up the June issue of "Essence" magazine, hitting newsstands today, or go online to CNN.com/whatmatters.
Chicago's children are being killed at an alarming rate as youth violence escalates. More than 30 school-aged children have died in the last nine months alone.
We get details now from CNN's David Mattingly.
(BEGIN VIDEOTAPE)
LAKEESHA STEVENS, SON WAS SHOT: Count how many ladybugs are there.
DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Kindergarten turned out to be a lot harder for Martrell Stevens than his mother could have ever imagined.
MARTRELL STEVENS, SHOOTING VICTIM: Fine.
L. STEVENS: Fine.
MARTRELL STEVENS: Fine.
MATTINGLY: A year ago, he was sleeping in the car as his mother prepared to pull out on to a Chicago street when he was shot and partially paralyzed.
L. STEVENS: It can happen to anyone. You can be walking, you can be walking, you can be anywhere. It can happen to anyone.
MATTINGLY: Martrell easily could have died. In just this school year, more than 30 school-aged children are dead. Their faces are posted online by the "Chicago Tribune," silent reminders of the growing mountain of grief.
DIANE LATIKER, FOUNDER, "KIDS OFF THE BLOCK": They come by here, they do this. They come by here in cars and families come and cry. You can hear them in my house screaming.
MATTINGLY: Diane started this memorial in a vacant lot hoping to shock the city into action. She started with 30 stones marked with the names of 30 young victims. Today with 153 stones, she's the one who is shocked.
(on camera): Who is failing these kids?
LATIKER: We all are.
MATTINGLY: Is it the city? Is it the police? Is it the schools?
LATIKER: We all are.
MATTINGLY (voice-over): The youngest victim remembered here was only 10. Among them, 16-year-old Blair Holt, the aspiring song writer whose death sparked protest and demands for action.
(on camera): But two years later, the violence is getting worse, not better. We wanted to know why more young people are dying this year than last, and what is being done about it. But community activists tell us they're at a loss to find any simple explanation.
(voice-over): The recent discovery of a 15-year-old who was beaten, shot in the head, and burned took the out of control violence to a frightening level. Chicago's Father Michael Pfleger thought it was time to put out an SOS.
(on camera): That's a pretty strong message, what are you trying to say?
REV. MICHAEL PFLEGER, ST. SABINA CHURCH: Well I think it is strong. I think it's a radical move, but I think it's a radical problem.
MATTINGLY (voice-over): He ordered the church's flag to be hung upside down, a symbol of distress.
PFLEGER: This is an epidemic.
MATTINGLY (on camera): If we had this many Chicago young people dying of swine flu, what kind of resources would you see coming to this city?
PFLEGER: There would be a great influx of resources to say let's stop this. Let's deal with this. MATTINGLY: But because it's violence, what are we seeing happening?
PFLEGER: We're hiding it. We're ignoring it. We're denying the problems.
M. STEVENS: I can walk well (INAUDIBLE).
MATTINGLY (voice-over): But there's no denying the loss. Martrell Stevens is adjusting to his loss with youthful energy and optimism. In a city where dreams are disappearing, he believes he will one day walk again.
(END VIDEOTAPE)
HARRIS: You know, we really wanted to hear how all of this violence is affecting families in Chicago. CNN SIU's Abbie Boudreau gave a video camera to a mom and her 10-year-old son for a couple of weeks so they could show us just how difficult life is after losing a young member, a family member, to gun violence.
(BEGIN VIDEO CLIP)
PAM BOSLEY, VICTIM'S MOTHER: To everybody, this is my baby. This is where I have to visit my son at, at the cemetery. This is unfair for any mother to have to visit their baby here. This doesn't make sense.
He didn't deserve this, (INAUDIBLE), nothing. And I'm here, at a cemetery, visiting my baby. And my kids can't even come out here and see their brother. This is crazy. This is not the type of life that no mother should ever have to go through.
(END VIDEO CLIP)
HARRIS: "This is crazy."
You can see the rest of this family's powerful video diary tomorrow night, 10:00 Eastern, with CNN's Don Lemon.
(COMMERCIAL BREAK)
HARRIS: Pedaling to make a point. Energy Secretary Steven Chu -- OK, not bad form -- rode his bike today from his home to a rally at Freedom Plaza in Washington. The event was designed to highlight the need for clean energy transportation. The administration says it is part of its commitment to reduce U.S. dependence on foreign oil.
Let's get an "Energy Fix" here.
Chrysler and GM are shuttering thousands of dealers all across the country, changing the face of the American auto industry in a big way. The dealerships that remain will soon be turning their attention to electric cars. When they do, we'll see cars that may look a lot different than what we see on the road right now, to be sure.
CNNMoney.com's Poppy Harlow taking a look at some of the changes.
Good to see you, Poppy. Good Friday.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Hey there, Tony. Happy Friday.
Yes, with all these dealerships closing, the ones that will remain, the company saying they're going to try to make them more profitable. You're going to see electric cars in them -- that is for sure -- in just a few years.
What they're going to do is to obviously take out the internal combustion engine. That's going to open up more space, a lot of design possibilities.
So we spoke to some of the designers at Ford and at GM. They said taking out the engine and all the plumbing around it opens up a lot of space, a larger interior. One of the top designers at Ford told us they're actually, believe it or not, looking at animals like fish, Tony, for inspiration.
You see the Toyota electric car right there, the Tesla. Next you're going to see one from GM, the Chevy Volt, right there.
But they do caution, Tony, they're not going to make them too futuristic looking. No Jetson cars.
Now, the Ford designer saying, listen, a truck is going to look like a truck. A Mustang is going to look like a Mustang. Because the whole point here is you have to draw buyers in, especially right now.
Some other changes, Ford and GM designers saying we're going to see more space. The driver can move up further, right, because the engine isn't going to take up so much space, get a better view of the road. The cars will likely be smaller, less bulky. But that doesn't necessarily mean, Tony, they'll be less safe, because what we're going to see, most likely, is the weight in the car distributed more evenly, maybe even the battery right in the middle there, between the driver and the passengers, in the back -- Tony.
HARRIS: That's interesting.
HARLOW: Yes.
HARRIS: Poppy, how important are these new design features as this auto industry kind of remakes itself, reshapes itself?
HARLOW: Incredibly important, because if you don't design something that people like, they're just not going to buy them. And then the companies are not going to be on that road to viability that they talk so much about.
People used to show off their V-8 engines, their big Hummers. But they're not going to show off their battery packs; right?
They're going to instead maybe brag about how aerodynamic their car is, or the fuel economy, or the spacious interior because it's a battery-powered car. But some big challenges still ahead, Tony.
We've talked about it many times. The price, the price on that Chevy Volt...
HARRIS: Price points, yes.
HARLOW: ... supposed to be about $40,000. That's expensive.
And the range. The Chevy Volt is going to have only 40 miles on a battery.
So big challenges lie ahead, but they're going to look a bit different. We'll see if the buyers like them.
HARRIS: Yes, exactly.
Poppy, appreciate it. Have a great weekend.
HARLOW: Sure. You too.
HARRIS: President Obama has been forced to back down from some of the statements and promises he made on the campaign trail. We'll take a look at some of the hard lessons he's getting in the Oval Office.
(COMMERCIAL BREAK)
HARRIS: How about this? We knew this was happening in this hour. President Obama meeting with the -- oh, and I don't know the name of the manager. I want to slap myself.
Someone tell me the name of the manager. I'm thinking that's -- Charlie Manuel. Oh, he was with the Indians when I was in Cleveland.
God. That hurts.
Charlie Manuel, manager of the world champion Philadelphia Phillies.
And there's the team, superstars on that team. You've got to be familiar with that Ryan Howard. Boy, he is a crusher, for sure. I think he's led Major League Baseball at least once in homeruns.
All right. Moving on now. Let me not pass on the opportunity to direct you to CNNMoney.com. At this point you have to be fully aware of the fact that some terrific work is being done by our money team there at CNNMoney.com. So visit the site regularly for the latest financial news and analysis.
Now let's get you to the big board now. Three hours into the trading day. As you can see - I think we were in positive territory earlier in the day, but now we are down. The Dow down 34 points. The Nasdaq essentially flat on the day. We will be following the numbers throughout the day with Susan Lisovicz right here in the CNN NEWSROOM.
Eleven hundred General Motors dealerships find out they're on the hit list. GM notified the deals today that it is terminating their contracts. Many of them are expected to close up shop this year. Others could stay open through September of next year. Peter Valdes- Dapena is CNNMoney.com's -- well, he's our go-to guy on this industry and he has been monitoring a GM conference call this hour.
And you know what, Peter, I had some notes on what came out of that conference call . I can't find them. So tell us what you learned out of the conference call.
PETER VALDES-DAPENA, CNNMONEY.COM CORRESPONDENT: Well, it sounds like you've gotten most of what's going on there. They've notified 1,100 dealers that they're not going to be part of, as GM executive Mark Gwinnett put it, they're not going to be part of General Motors going forward. They're not going to be part of the new GM.
For the most part, he said a lot of these dealers actually sold -- and this was surprising to me -- fewer than 35 units a year. So some of them had very low sales or low CSIs -- for its customer service index scores. Many of them also just were underperforming in other ways. So they've been asked to let their contracts go. Well, have been told that their contracts will not be renewed. And this will happen in fall of 2010. Although, as you noted, some dealers may simply choose to wind things down sooner.
HARRIS: Hey, Peter, a couple of questions here. We may not know the answer. Maybe it wasn't discussed in the conference call. Do we know what happens with the inventory on the lots of some of these dealerships that are now slated to be closed?
VALDES-DAPENA: Right. Well, ordinarily what happens is this. Is that they have some time here. They will sell off that inventory to customers. Much of it they may sell off or transfer to other dealerships that are looking for some of these cars. In the end, GM, assuming they're not in bankruptcy by that time, which they shouldn't be, will be able to buy back this inventory, buy back these cars that may be left at the end.
In Chrysler's case, because Chrysler is in bankruptcy and these dealers only have a month, Chrysler can't buy back that inventory. So that's a very difficult situation for those dealers.
HARRIS: Yes. And, Peter, we also know that there are state regulators attached to all of these relationships. What's going to happen with those regulations and those relationships those dealers had with states?
VALDES-DAPENA: Well, there are very strong state franchise laws that protect dealers. That's why you doesn't see this kind of thing happening very often. It's actually very expensive and very difficult for a GM or an automaker to shut down a dealership because that's an independent business protected by very strong laws. That's why this is happening all of a sudden so fast because bankruptcy is out there.
In Chrysler's case, they're taking advantage of the fact that they're in bankruptcy to do something they could never ordinarily do, is just say, take these contracts and rip them up. Forget it. It's over. In GM's case, there's a good likelihood they will be in bankruptcy. That gives them the negotiating leverage to start saying now, look, guys, we're going to wind these relationships down. We're going to pull out these agreements because these dealerships are protected. And many of the GM dealerships and Chrysler dealers too, even though they're in bankruptcy, will fight this. They're going to try to stop this from happening in many cases.
HARRIS: Hey, Peter, one more quick question (ph). And I don't know if it was addressed in the conference call but I'm going to ask it anyway because I'm hearing this sentiment a lot. There is a growing concern that some of these dealerships, GM dealerships that are being closed and some of the Chrysler dealerships as well are largely in urban areas, big cities. And in many cases, African- American dealership owners are going to be hit really hard by some of these closings. Was that an issue of concern that was mentioned in the conference call that you were listening to?
VALDES-DAPENA: I didn't hear that concern mentioned. However, I did speak with the head of the GM Minority Dealers Association yesterday. It's certainly a concern for them. The bigger deal doesn't seem to be the urban aspect, but minority dealership owners entering the business often, because of financial constraints, tend to buy stores in locations that aren't as desirable or that better financed dealership owners didn't want to take on. So they end up in some of the less desirable locations to begin with where you're struggling with sales and things like that. And so they're often ones that might be targeted for this kind of cut.
In Chrysler's case, it didn't seem like it actually shook out that way. They were not targeted more heavily than anyone else. In GM's case, she told me that two-thirds of her members are already Saturn, Hummer, Saab, and Pontiac dealers owners. So they've already been hit hard even before this announcement. So we'll have to see as word of which dealerships are closing come out if that actually plays forward and there are -- there is more of an impact there.
HARRIS: All right, Peter, appreciate it. Thank you.
President Obama looks ready to resume some military trials at Guantanamo Bay, but administration officials tell CNN, terror suspects will have greater constitutional protections than they did under President Bush. President Obama suspended the military commissions on his third day in office for a legal review.
As CNN's Brian Todd reports, resuming the trials would reverse a pledge from the campaign trail.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): August 2007, then Candidate Obama unveils his plan for terror suspects in U.S. custody.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: As president, I will close Guantanamo, reject the Military Commissions Act and adhere to the Geneva Conventions. TODD: Now President Obama is moving toward closing Guantanamo, but senior administration officials tell CNN, the White House is leaning toward reinstating the military commissions that Mr. Obama suspended when he took office. Is the Obama team adopting the same posture on commissions as its predecessors?
GEORGE W. BUSH, FORMER U.S. PRESIDENT: The Military Commissions Act will also allow us to prosecute, capture terrorists for war crimes through a full and fair trial.
TODD: White House officials tell us, President Obama is not mirroring the Bush policy.
TODD (on camera): They say any new commissions would have enhanced rights for detainees and that as a senator, Mr. Obama voted against President Bush's Military Commissions Act because he believed it didn't have enough due process for terror suspects.
(voice-over): But a White House source and a Republican congressional source tells CNN, the administration is considering plans to hold some suspects indefinitely. And there are other highly charged issues of security where the Obama and Bush teams sound very similar. Here's Donald Rumsfeld in May 2004 on the potential release of more Abu Ghraib photographs.
DONALD RUMSFELD, FORMER DEFENSE SECRETARY: If these are released to the public, obviously it's going to make matters worse.
TODD: President Obama on Wednesday on releasing additional detainee abuse pictures.
OBAMA: The most direct consequence of releasing them, I believe, would be to further inflame anti-American opinion and to put our troops in greater danger.
TODD: On that and on his war management, the president draws blistering criticism from the left. Democratic Congressman Gerald Nadler (ph) says, "what is our policy in Afghanistan? Is it an open- ended commitment to remake the country? I don't know. That would worry me."
CNN analyst David Gergen, who's advised Republican and Democrat presidents, says Mr. Obama is fulfilling his campaign pledge to put more troops in Afghanistan, but like his predecessors, is learning some tough lessons on all these security issues early on.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: As commander in chief, when he suddenly faces harsh realities that are reflected in classified documents and in personal briefings from commanders in the field, that he didn't have to face as a candidate. And as with most presidents, he's tending more back to the center on national security.
TODD: Gergen says of all those national security issues, Afghanistan is where the president faces the most pressure for results. He says this is about to become Obama's war. And if he doesn't produce some kind of stability in Afghanistan or in neighboring Pakistan, it could take the air out of his presidency.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
HARRIS: And another reminder, CNN will bring you the president's commencement address at Notre Dame University Sunday live at 2:00 p.m. Eastern. That's 11:00 Pacific.
He was a gifted base guitar players. He was also a gifted basketball player. Wayman Tisdale, a former NBA player from Oklahoma University, died early this morning. Tisdale was diagnosed with cancer in 2007 and lost a leg to bone cancer last year. He played pro ball with teams in Phoenix, Sacramento and Indianapolis. Tisdale also was a self-taught base guitarist and he was a terrific player. Just terrific. Wayman Tisdale was 44.
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HARRIS: "Survival of the Fittest." Our Friday segment. Here she is Brooke Baldwin.
And, wait a minute, let's move this, because this is not the proper presentation. This is not the proper presentation.
BROOKE BALDWIN, CNN CORRESPONDENT: Closer to you. I like that. We're working on it.
HARRIS: This is our weekly series. You have been meeting business people who are making changes. Creative changes, in many cases, just to stay -- to survive the economic downturn. Who did you find for us this week?
BALDWIN: We're talking sweet success today. We'll get -- I've got like icing on my fingers. Lovely, right?
HARRIS: Yes, yes.
BALDWIN: We're talking sweet success here. Her name is Tanya Jones. She runs the Sweet Auburn Bread Company. It's in the neighborhood where Dr. Martin Luther King, he grew up. He preached. Probably heard of it, Sweet Auburn. Now she got hit with a triple whammy way above and beyond the recession, but now she is coming back stronger than ever.
Here now is her story with tips of her sweet success for all entrepreneurs.
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BALDWIN (voice-over): You can't get better publicity than this. A president tasting a southern chef's sweet potato cheesecake.
BALDWIN (on camera): When you have the president in your shop, it puts you on the map.
SONYA JONES, OWNER, SWEET AUBURN BREAD CO.: Exactly.
BALDWIN (voice-over): That was 12 years ago. Today, photos of that memorable moment are plastered all over Sonya Jones' quaint bake shop. A shop located in one of the most historic streets in America, the Atlanta neighborhood where Dr. Martin Luther King Jr. lived and preached, Sweet Auburn.
JONES: They couldn't stop over in Atlanta and not come visit the King Center. That's a great feeling.
BALDWIN (on camera): I not have a piece of your . . .
JONES: And, yes, some, you know, since you're here.
BALDWIN: Sweet potato cheesecake.
(voice-over): That cheesecake quickly became her recipe for success. From Rachael Ray to "Southern Living." Sonya and her 23- year-old son Bobby turn out hundreds of tasty treats every day, catering events and selling to whomever walks through their door.
JONES: Well, we have pie. Sweet potato pie. Southern pecan pies. Pound cakes. Buttermilk lemon chess (ph) pie. Custard.
BALDWIN: But the Sweet Auburn Bread Company saw some not so sweet times last year.
BALDWIN (on camera): Fast forward to 2008. What happened?
JONES: Well, there was a little delay.
BALDWIN: A little thing called a tornado.
BALDWIN (voice-over): The rare twister that hit downtown Atlanta knocked down buildings in her neighborhood. The devastation just across the street.
JONES: It was really bad when, of course, the street was shut down and I think business was down at least 30 percent.
BALDWIN: Then gas prices soared last summer.
JONES: We're a tourist destination. So, of course, there were a big decrease in tourism.
BALDWIN: And then the recession hit hard.
JONES: A lot of people did not have the holiday parties. And the question at times was, do I continue? I mean that was a question.
BALDWIN: But instead of folding, Sonya found strength in crisis.
JONES: Like they say, when it gets tough, the tough gets tougher. It was a time for me to look back at my business. To re- evaluate my businesses, you know, my weaknesses, my strengths and really what were the customers really asking for.
BALDWIN: She is now making up for that drop in business. First, she upped her variety, but downsized her sweets.
JONES: During the tough times, people want their comfort food and their comfort desserts, you know? They may not want a whole pie, but they may go for the sweet potato tart.
BALDWIN: Second, she brings her products to the people, sending her son to local farmers' markets almost every day. And third, she's dabbling in online social networking.
JONES: Facebook. YouTube. You know, crossing the Internet.
BALDWIN: Until the economy bounces back, this optimistic entrepreneur is hoping Atlantans will keep turning to her for sweet comfort.
JONES: You know, you need a slice of sweet potato pie to soothe you.
(END VIDEOTAPE)
BALDWIN: To soothe you. And so I brought you that pie. And cookies. And pecan pie. Sweet potato pie. And a muffin. And velvet cake.
HARRIS: Oh, you have red velvet in there?
BALDWIN: I'm your best friend today.
HARRIS: You've got red velvet cake in there?
BALDWIN: Let's talk, though, while a little bit of reporter interaction, you know, so we've got to have a taste. This is the first taste here of the famous -- you know, when President Bill Clinton taste this in '99.
HARRIS: I appreciate it.
BALDWIN: So any way, the point is, is one of her tips she was saying, you know what, people aren't necessarily coming in right now. They're not buying my big cheesecake for $45. They're buying a smaller version for five. People still need their fix, obviously.
HARRIS: All right. Reynolds, I'm going to try to save a little bit for you here, but this -- this is good eating that's good for you.
REYNOLDS WOLF, CNN METEOROLOGIST: You know, what is it about newsrooms that you just bring in any kind of food. Could even be anything.
BALDWIN: It will be gone.
WOLF: You could bring in a plate of Styrofoam and people are going to eat that. HARRIS: This is -- this -- no, no, let me tell you something. The point of discipline here. This has been around most of the morning, OK?
WOLF: Yes.
HARRIS: Most of the morning. I've been trying to get at these eats all morning. Your producer was threatening . . .
BALDWIN: Amy Chilag (ph).
HARRIS: Was threatening to put me in stress position, OK.
BALDWIN: He was like, do not touch this.
WOLF: Wow.
HARRIS: All right. Do not touch this.
BALDWIN: Do not get near that.
WOLF: Guys, I have Jones (ph) in for some goodies. You're going to have to bring some over to the weather center. You really are.
HARRIS: It's not going to happen (INAUDIBLE).
WOLF: Let's talk about something different real fast. While you guys are enjoying your food, I'm going to entertain the rest of America with what's happening here.
HARRIS: OK.
WOLF: We've got some strong storms not to tasty near Chicago and back over through Davenport and Ottawa (ph), even over towards Kansas City. Yesterday in Indianapolis, we had some flooding. You're going to see one person here in an SUV trying to cross a flooded roadway. Never a good idea. The person was rescued. But certainly always keep in mind that if the water happens to be 18 inches or higher, it can pick up any vehicle, even a big one like this, and move it further downstream.
We're going to talk about a very big body of water. Namely the Pacific Ocean. It's the planet's largest feature. You can see it from here. According to the satellite view, it's pretty quiet for the time being, but it could be a busy season. And with the season starting today, here's a look at some of the names very quickly. Let's go through a couple of these. Andres, Blanca, Carlos, Dolores, Enrique, Felicia, Guillermo, Hilda, Ignacio, Jimena, Kevin, Linda, Marty, Nora, Olaf, Patricia, Rick, Sandra, Terry, Vivian, Waldo, Xina, York and Zelda.
I do not, by the way, see any Tony in this list. That is certainly good news, I would imagine.
HARRIS: At the rate I'm eating this, I'd be a cat 5. Look, we're going to save a little bit for you, all right.
WOLF: Absolutely. Sounds good, man. Looks fantastic. It really does.
HARRIS: I need a chase for this. I don't know.
BALDWIN: We're not so fit. Survival of the fittest.
HARRIS: Not so fit.
BALDWIN: Not so fit anymore.
WOLF: See you guys.
HARRIS: More CNN NEWSROOM in just a moment. We'll be back.
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HARRIS: Keeping your retirement nest egg safe and finding lower mortgage rates. Some of the money issues on your mind. And let's check in with Gerri Willis and her team at The Help Desk.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: We want to get you answers to your financial questions. Let's get straight to The Help Desk. Walter Updegrave is a senior editor at "Money" and Doug Flynn is a certified financial planner and founder of Flynn Zito Capital Management.
Let's get right to the questions. Louie asks, "my wife and I are retired teachers and we have our retirement funds in two fixed annuities with different companies: one at 3.5 percent and the other at 4.5 percent. Are these good investments for the bulk of our retirement funds, and are they safe there?"
Walter, everybody is obsessed with safety.
WALTER UPDEGRAVE, SENIOR EDITOR, MONEY: Sure. Well, let's take the investment part first. Basically these are fixed income investments. It's kind of like a CD except you're getting it from the insurance company instead of the bank. Now that may be good that you're getting interest in the case of an annuity. It's tax deferred interest. But you're not going to get any capital growth from this. So I think most retirees want at least a little bit of capital growth.
WILLIS: Your return is locked in.
UPDEGRAVE: Yes. You're just going to get an interest rate of return. So I don't think that you want to have all of your money in these annuities.
The other thing you want to be careful of is sometimes getting access to your money in an annuity can be expensive. Most annuities have surrender charges that can often go up as high as 10 percent and last for several years. So you may have to pay to get your money out.
WILLIS: All right.
UPDEGRAVE: On the safety part, there are two things. One is, you want to make sure you have a highly rated insurer, rated A or better by AM Best (ph), and then, while they don't have FDIC insurance, annuities are covered by something called State Guarantee Associations and you can check out your state's limit. It's usually $100,000 or more by going to nolgha.com.
WILLIS: Great information, Walter.
Let's get to the next question. "I bought my house nine months ago with a 7.5 percent APR and a credit score over 750. What can I do under the Obama plan to reduce my mortgage payments down from $1,900 per month? The price of the house was $230,000 and my wife and I put down $30,000."
Doug, what do you make of this?
DOUG FLYNN, FOUNDER, FLYNN ZITO CAPITAL MANAGEMENT: Well, to have a 7.5 percent interest rate from nine months ago is a problem there I think, whether it's probably not the credit but it's probably an income or an assets problem, which is why that rate is so high.
What you need to do is, it sounds to me like he has a 15-year mortgage, because that's the reasons those payments are so high. So the first thing I would look at is maybe looking at a 30-year mortgage if you're having trouble making those payments. That would reduce the payment by about $800 a month at the current rate. So that might be the way to go for him.
WILLIS: That's a great way to start. All right, guys, thanks for your help today. The Help Desk is all about getting you answers. Send me an e-mail or gerri@cnn.com. Or log on to cnn.com/helpdesk to see more of our financial solutions.
And The Help Desk is everywhere. Make sure to check out the latest issue of "Money" magazines on newsstands now.
HARRIS: So if you want to get ripped, you may need to skip the gym and head to the roller rink. Yes, the roller rink. Our chief medical correspondent, Dr. Sanjay Gupta, takes a look at some women who are rolling into fitness.
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DR. SANJAY GUPTA, CNN CORRESPONDENT (voice-over): They are mothers and teachers, wives and workers. But put a pair of skates on them and they become the Mason Dixon Roller Vixens. This group of dangerous divas is just one of many women's roller derby clubs popping up all over the country. May look like a breeze, but racing around the rink trying to buck blockers and jostle jammers is no easy task. On the average, these women can burn up to 400 calories an hour. Amber Mori, otherwise known as "Cykosis," has been skating for over a year.
AMBER MORI, "CYKOSIS," #96: After probably eight or nine months, I just started dropping pounds like crazy. I think I've lost 16 since I started.
GUPTA: Completions, like this one against the Dutchland Derby Rollers, are tough enough. But the workouts are even tougher. Each practice their coach requires the gals to do sit-up, push-ups, stretches to help them with their endurance. Team Captain Joslin Basler (ph) has always been athletic, but says this is the best workout she's ever had.
JOSLIN BASLER: I don't go to the gym anymore. I just have roller derby.
GUPTA: Clubs like the Vixens are always looking for new members. But think before you skate. Most of these ladies know the pain of bumps and bruises, as well as the thrill of victory.
Dr. Sanjay Gupta, CNN reporting.
(END VIDEOTAPE)
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HARRIS: Two journalists working for Al Gore's Current TV are being held in North Korea. Euna Lee and Laura Ling have been held since March 17th for illegally intruding into the communist country. North Korea's news agency reports the two will be tried June 4th. Secretary of State Hillary Clinton says the announcement of a trial date is a sign that their detention will be resolved soon. Gore spoke exclusively with CNN's John Roberts today on "American Morning." The vice president was asked, would you go to North Korea to try to win their release?
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AL GORE, FORMER U.S. VICE PRESIDENT: I would do anything within reason, including going, at the drop of a hat. But it is -- that's not -- it's not some place that you just, you know, buy a ticket and show up at the airport. It doesn't work that way. It's a different -- it's a different kind of country, as you know.
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HARRIS: And we are pushing forward now with the next hour of CNN NEWSROOM with Kyra Phillips.
