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GM at the Crossroads; North Korea Test Fires More Missiles; Taliban Promising More Attacks; Homeless Teen Wins Scholarship; Father Cutie Leaving the Catholic Church; Peace Corps for the Classroom; Fighting Cyber Crime

Aired May 29, 2009 - 09:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Tough decisions today at General Motors with bankruptcy all but certain, the focus is now on limiting the damage and looking ahead.

Plus, nuclear tensions on the rise. Just moments ago we learned that North Korea may have given the world new cause for concern.

And letter perfect. A national spelling bee champ is crowned, and this morning, she joins us right here in the NEWSROOM.

Good morning, everybody. I'm Heidi Collins. It's Friday, May 29th and you are in the CNN NEWSROOM.

All right. This morning, General Motors at the crossroads. Take a look at this now. We will be watching very closely some key decisions that could be made that will shape the way that the company goes into bankruptcy and also how it could possibly come back out. And also, Christine Romans is going to be looking at the road to recovery. Lots of potholes there, but also some possibilities to talk about, too.

And Gerri Willis is going to take us from the boardroom to the showroom. What does that mean? Well, we'll talk about those changes and how they could affect you, the consumer.

First, though, quick rundown of what we know.

Today, GM is expected to announce the fate of the Hummer, the massive SUV that's not so popular anymore because of rising gas prices.

Also today, the company's union workers will finish voting on a modified contract. Cutting their own benefits now could make the company stronger down the road.

And we'll look ahead to Monday's government deadline. It looks like bankruptcy is a done deal. Which of the company's 14 plants will be shutdown? We'll talk about all of it.

Even if you do not own a GM vehicle you do have a big stake in this impending bankruptcy. Taxpayers will own nearly three-quarters of the new company.

Here to break down the knots and bolts, Christine Romans of the CNN Money Team.

Hey there, Christine. Good morning to you.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning, Heidi.

Let's talk about the extreme makeover of GM and who's going to own what. Shareholders, I want to be very clear about this. Shareholders will end up with nothing in this company if, indeed, it files for bankruptcy as we expect.

Zero percent. That means the stock holdings you have in your 401(k) or in your mutual funds that are tied to the Dow or the S&P will be worthless. Creditors would get 10 percent. And we told you yesterday about that. 11th hour bond deal where creditors will get 10 percent with the -- they could get an additional 15 percent if the deal goes through the way the treasury and the company and the creditors want it to.

The union will get 17.5 percent and Heidi, the government, that's you and me, the taxpayers, would own 72.5 percent of this company. This is would be, as the headlines have been saying, Government Motors, Heidi.

COLLINS: Yes. And it will be a much leaner GM, of course, right?

ROMANS: It will be. And the bankruptcy process, what they hope to do is to shed some of the un-performing assets, the things that are not as healthy and focus on the things that they think can make them money.

So that's going to mean brands are going to disappear and some are going to be highlighted in part of this new GM. Among the brands you will see, GMC, Cadillac, Chevrolet, also Buick. These are the brands that the new GM is going to focus on. There will be fewer dealers, fewer plants, fewer employees and less debt for this company.

And the hope is among senior administration officials that this new part of the company will be able to emerge from bankruptcy in two or three months. The old part of the company could be mired in bankruptcy for six to 18 months as they try to find buyers or liquidate other parts of the company including Hummer, Saab, Pontiac we already know is gone and also Saturn.

So some of the brands that might be very familiar with will not be around again for General Motors once this process is all said and done, Heidi.

COLLINS: Right. Yes. Probably not a huge surprise there. What about our "Romans Numeral"?

ROMANS: "Romans Numeral," 1925, Heidi. I'll give you a little hint. It's a year. 1925 is the year the Dow Jones Industrial Average started -- included for the very first time General Motors.

So GM is in the Dow. The Dow 30. That number we tell you everyday...

COLLINS: Yes.

ROMANS: ... that the -- it's sort of like the taking the pulse of what's happening in the company that are such a big part of this economy. 1925. If this company files for bankruptcy, it will be booted out of the Dow. Think of that. 84 years as a member of the Dow Jones Industrial Average. It will be booted out, of course, because the stock would be worthless.

COLLINS: Yes. And then who gets that spot? I guess that's a different story.

ROMANS: That's a different story. We don't know yet.

COLLINS: Sure.

ROMANS: And I'm sure there are already a lot of companies who are vying for that honor.

COLLINS: Oh yes. I'm sure. All right. Christine Romans, thanks so much on the GM story for us today.

ROMANS: Sure.

COLLINS: Meanwhile, GM heads to an uncertain future and customers, of course, have many questions. What about their warranties, replacement parts and resell value of their vehicles?

Here with some answers now is CNN personal finance editor Gerri Willis.

Gerri, good morning to you. Yes, a lost questions out there, of course, for consumers.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's right, Heidi. Well, the segue here if you own a GM is don't panic.

Look, even if GM is in bankruptcy, the company will continue to operate. Cars will still be sold, you'll still be able to get parts and service.

If you own a GM car, you shouldn't worry about the warranty. The government has already stepped in and said it would guarantee warranties from companies in bankruptcy during the restructuring period. And GM has said it will honor warranties if it goes into bankruptcy.

Now if you own a Saturn, a Saab or a Hummer, these are models that GM is trying to sell. The new owner will probably take over warranties and the contract typically isn't changed, but going forward there could be modifications to the warranties on these cars.

Now if you bought a dealer specific warranty instead of a factory warranty, your risk is bigger because dealers can go out of business more easily. Heidi? COLLINS: Yes. Yes. Absolutely. Well, so, then, what should people be most concerned about with this news?

WILLIS: Well, let's take a look at the possible impact of a GM bankruptcy. Your dealership may close. About 1100 dealerships we already know will close. That means if you're used to going to a specific dealership you may have to go somewhere else. And it may take longer to get your car serviced but these closings aren't going to happen for at least a year so you can try to plan ahead here.

Now some parts may be harder to find ultimately. Specific factory parts for certain models may be more difficult to find because auto part makers won't have the same demand and they are having their own financial problems after all. The routine items like brake pads should still be out there and available.

Now car depreciation, we think a lot about that. You know a new car depreciates 20 percent once you drive it off the lot but a car from a troubled automaker like GM may depreciate as much as 30 percent and then more as the years go by.

COLLINS: Yes.

WILLIS: So if you like to trade your GM car in every few years, well, you're taking a pretty big risk here, Heidi.

COLLINS: Yes. And what should you be concerned about if you're not talking about trading in and you're actually in the market for a brand-new car?

WILLIS: Well, people are thinking they're going to get a big deal here if you're in the market for a car. The majority of GM models, they have great incentives right now and that's probably only going to get better. But make sure you buy a manufacturer-backed extended warranty from the automaker, not the dealer as we said before.

And finally, make sure you do your homework. Look, "Consumer Reports" recommends just eight GM cars out of 41 models that were tested. You can compare that with Chrysler. There were zero recommendations and Ford, in case you were wondering, has 16 recommended vehicles out of 23.

That's according to "Consumer Reports." But you want to pay attention to how well these cars operate, not just the price tag.

COLLINS: Yes. Yes. You should always be doing that anyway, I guess.

WILLIS: That's right.

COLLINS: All right.

WILLIS: Just smart to do.

COLLINS: Gerri Willis, our personal finance editor, thank you, Gerri.

WILLIS: My pleasure.

COLLINS: And this could be a critical day in bankruptcy court for Chrysler. A third day of testimony under way and a judge could rule today on the company's sale to that Italian carmaker we've been talking about, Fiat.

Some debt holders oppose the sale and say they are going to appeal any court approval of it. The clock is ticking on June 15th, Fiat can walk away from its offer if the deal is still in limbo.

CNN tonight. Ali Velshi and Christine Romans explore the past, present and future of U.S. carmakers. "How the Wheels Came Off: The Rise and Fall of the American Auto Industry." It's only on CNN you can see it tonight at 8:00 p.m. Eastern.

To North Korea now. Not sitting still this morning. A short time ago, we learned North Korea has test-fired another short-range missile. This is the sixth missile launch this week.

Before the latest launch, North Korea fired off another threat promising, quote, "self-defense action if pushed by the United Nations." The U.N. Security Council is talking about tougher sanctions in response to Monday's underground nuclear test in North Korea.

And today's test was a short-range missile, but it looks like North Korea may be ready to test another long-range missile as well.

CNN's Pentagon correspondent Barbara Starr has been watching the story for us live this morning with new information to share with everyone.

Barbara, good morning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning to you, Heidi.

North Korea, if they are sending a message, it's not done yet. We have learned that the U.S. intelligence community is now seeing some activity as a long-range missile site in North Korea over the last couple of days.

They have seen vehicle movements at this site. It's the same pattern of activity, they say, that they saw in advance of a previous long-range missile test. Now it should be said the U.S. hasn't come to any conclusion that North Korea is about to launch a long-range missile, but they are seeing that pattern of activity and it's quite worrisome to them.

Defense Secretary Robert Gates on his way to the region saying that there isn't a crisis. Still very much going down the road of diplomacy, saying to reporters as he made his way to the Pacific, quote, "I don't think that anybody in the Obama administration thinks there is a crisis. What we do have, though, are two new developments that are very provocative, that are aggressive, accompanied by aggressive rhetoric, and I think it brings home the reality of the challenge that North Korea poses to the region and to the international communities."

So what you see there, Heidi, is a lot of to and fro. North Korea making moves. Nobody quite sure what they are up to, but the U.S. very much still trying to go down the road of diplomacy. Heidi?

COLLINS: All right, our CNN Pentagon correspondent Barbara Starr this morning keeping a close eye on the situation with North Korea.

Thanks so much, Barbara.

Meanwhile, keeping you safe in cyberspace. President Obama on the case today. He's telling us about the new cyber czar job.

REYNOLDS WOLF, CNN METEOROLOGIST: And we're going to take a look at the possibilities of rough weather along the eastern seaboard and into the Midwest. Plus we're taking a sharp eye on tropical depression one. Let you know where it's headed coming up right here on the CNN NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: The U.S. government is taking on cyber crime. President Obama announcing today the creation of a cyber czar position.

Our Suzanne Malveaux is live at the White House now with more details on this.

Suzanne, what exactly is he planning to announce here? Just that the position is going to be made available?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: That's right, Heidi.

I actually talked to one of the White House officials who gave us an example. They said that you may recall before he became President Obama, in the days before that, his cell phone was actually broken into, hacked by a computer system.

They say this is something that could happen to Barack Obama, it can happen to anybody that these computer systems, both private as well as public, are controlling when do the lights go out, traffic jams, when airplanes actually land. All of these things extremely important.

A 60-day review simply says that, look, they believe there needs to be one person, one person in the White House that needs to coordinate, make sure that all the different government agencies are talking to each other about cyber security, whether it's Homeland Security, the Pentagon, NSA, all of that.

So that is the announcement essentially today. This is a growing problem, Heidi. The administration recognizing this. I want to give you some statistics here. This is 2005 cyber attacks of 4,095.

Now take a look at the second number here. This is 2008. More than 72,000 cyber attacks. It is a big, big problem. The administration is trying to get a handle on.

The second thing is they say that the director of national security -- National Intelligence rather, Dennis Blair, says the biggest threat when it comes to cyber attacks are from nation states, not from rogue players, but nation states like Russia and China.

And so this is something that's important enough to make sure that there is one person who'll make sure that everybody else is on the same page when it comes to cyber security.

COLLINS: So would it end being a cabinet level position, Suzanne?

MALVEAUX: It is not going to be a cabinet level position. There are already some critics who are saying, you know, does this person, whoever it is, have any teeth in their position here? If they're going to be answering to the national security adviser, the National Economic Council, but not to the president.

They don't really have a budget to work with. They can't dictate things necessarily. Really it's kind of a coordination position. So administration officials say this morning it is just the beginning, it's just the start here, but that's the very least they can do is try to make sure all the pieces are put together so they've got one direct way that they can focus on hyper -- on cyber security, rather.

COLLINS: All right. Suzanne Malveaux for us from the White House this morning, thank you, Suzanne.

And we are going to get some more details about the president's cyber security plan coming up next hour when he makes his announcement. It will come your way 10:55 a.m. Eastern. Of course we will bring that to you live when it happens.

President Obama gets no criticism from his predecessor, at least not publicly in his first major speech since leaving office. Former president George W. Bush defended some of his own policies including waterboarding but he would not take issue with his successor.

No TV cameras were allowed as he spoke at Lake Michigan College. He says he misses Air Force One, interacting with service members and the White House food. As for his legacy, he says he hopes this, quote, "The man showed up in office with a set of principles and he was unwilling to sacrifice his soul for the sake of popularity."

Reynolds Wolf standing by now in the Severe Weather Center to talk a little bit more about what we can expect across the country for the weekend. But that doesn't look good right behind you.

(WEATHER REPORT)

COLLINS: All right. Very good. Look forward to the weekend. Thank you, Reynolds. We'll check back later on.

Meanwhile, gaining weight during pregnancy. New guidelines now for what is considered safe and healthy for both mothers and developing children.

(COMMERCIAL BREAK)

COLLINS: New guidelines for pregnant women. How much weight can you gain and still be healthy?

CNN's chief medical correspondent Dr. Sanjay Gupta is here now with a look at what risks are associated with excessive weight gain during pregnancy.

But let's get started, Sanjay, with some of these new numbers.

A lot of women very interested in that answer to the question when they become pregnant. Why the change in these recommendations?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, there are a few things that are sort of inspiring these changes. Let me say, you know, doing a story about weight gain and pregnant women is one of the more dangerous assignments that I think I've ever had, you know? Forget war zones.

(LAUGHTER)

COLLINS: Has your wife called yet?

GUPTA: You got to be real careful here. And there are some pretty broad guidelines here. But what's inspiring the change, I think, now is a few things. One is that women are having babies later in life. So the mom is typically is older. Two is that, you know, we have issue with overweight and obesity in this country overall.

COLLINS: Yes.

GUPTA: And the third thing is there's more data on exactly the problems that both mom and baby can have if a mom gains too much weight during pregnancy. So just really quickly, let's look at the numbers here. Based on women who are at -- who are normal weight, who are underweight and overweight.

Rough, I guess, rough guidelines in terms of how much weight they should gain during pregnancy. Twenty-five to 30 pounds at normal weight all the way up to -- down to 11 to 20 pounds if a woman is obese.

We do know more about some of the complications potentially, again, that both mom and baby can have. But again, there's a couple of caveats here. One is, these are broad guidelines, Heidi. And two is that they're based on something known as body mass index.

COLLINS: Yes.

GUPTA: Which is not perfect. You and I have talked about this. Bodybuilders, for example, will always come up as overweight or obese. And pregnant women, it doesn't work very well for them as well either so...

COLLINS: OK, so...

GUPTA: .. careful with this.

COLLINS: Just to clarify, the numbers that we just saw on the screen, those are the new guidelines, correct?

GUPTA: That's right. That's correct.

COLLINS: OK. So what are the risks of too much weight gain these days?

GUPTA: Well, you know, it's interesting. For the mom, there's a risk of having high blood pressure. There's a risk of possibly having a C-section. For the baby, more than anything else, it's a risk that a heavy baby is more likely to become an obese child and an obese adult as well. So this concern about childhood obesity.

One of the things I found interesting, and you may have heard this, Heidi, is that gestational diabetes...

COLLINS: Right.

GUPTA: ... is something that's typically associated with weight gain during pregnancy. The Institute of Medicine which authored this report said not so fast. Based on the evidence that we're looking at, not necessarily are you going to develop gestational diabetes just because of weight gain. Most doctors still say that you've got to monitor it but not always going to be the case.

COLLINS: Yes, and it's got to be tough, too, I would think, if you are already pregnant and a little overweight. You know how do you manage to keep your weight down without risking the baby's health? Because I'm sure you're going to kind of want to watch what you eat, obviously.

GUPTA: Yes. Right. And so -- again, I'm being careful here. Watching what you eat, obviously, very important. Monitoring the baby early on, I think, is probably the most crucial thing.

COLLINS: Yes.

GUPTA: And if the baby is doing well, growing well, then, you know, continuing to exercise, continuing to watch what you eat very carefully, making sure you get all the appropriate vitamins including folate (ph).

But as a rough guideline, you know, about five pounds or so during the first trimester and then one to two pounds a week after that during the second and third trimester is a pretty good, sort of steady weight gain. If you're gain ago lot of weight all within a couple of weeks that might be a little bit of a red flag and if you're gaining a lot, too much, more so than either previous pregnancies or more than you'd expect, that's a red flag obviously as well.

COLLINS: All right. I think you tip-toed around the subject very well. But listen, smarty pants, we want to have you on again to talk about how to take it all off after the pregnancy. OK?

GUPTA: That's -- OK. I'll put my (INAUDIBLE) on it as I'm walking out of the studio.

COLLINS: OK. Dr. Sanjay Gupta, our chief medical correspondent. Thanks, Sanjay.

GUPTA: Thank you.

COLLINS: This morning, a group of students and teachers from Maryland are out of quarantine now in China. We've been telling about this story. They have been confined to their hotels since Monday because of fears they have been exposed to swine flu.

The mother of the youngest student talked to CNN's Alina Cho about their ordeal.

(BEGIN VIDEO CLIP)

ALESIA PETERSON, MOTHER OF STUDENT IN CHINA: The first news I actually got was a phone call from Hong Kong Health Department trying to track down Erica. They advised me that someone on her plane they felt had been exposed to the virus.

So I had some news before we actually got the report from the school that the students had been asked to come back to the hotel for a health check.

ALINA CHO, CNN ANCHOR: And tell me what is your understanding about what that quarantine entailed? Could they leave their room at all?

PETERSON: No. The information that I received from the teacher chaperones was that they each had hotel rooms. Some of them -- some of them had roommates and some of them did not. They were required to stay in their rooms but they could have their doors open and communicate across halls.

They could use the telephones within the hotel. They had e-mail access on computers. So they were somewhat isolated, but they could communicate with one another.

(END VIDEO CLIP)

COLLINS: And just a as a reminder of the students -- the fears of them being exposed to the H1N1 virus were all about someone who was on the plane with them who they initially thought may have had the virus and then ended up testing negative for not having it.

So after checking out OK, the group is getting an extra day now of sight-seeing before having to come home. It is a tough competition and it's not for the faint of heart. The challenge, spelling some of the most complicated words imaginable on national television. We are talking to the winner of the National Spelling Bee. Talk about staying cool under pressure, too.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: The economy in focus on Wall Street just about an hour ago. A new report on economic growth was released and, of course, the fate of the nation's biggest automaker still in question.

Susan Lisovicz is at the New York Stock Exchange now with a preview of the trading day.

Good morning to you, Susan.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Good morning, Heidi.

And there is the opening bell. We're expecting a slightly higher open, despite a disappointing read on the broadest look at the nation's economy.

That is the second look at GDP for the first three months of the year. Yes, the U.S. economy did fall off a cliff but we can take comfort in the fact that it was a slightly smaller cliff. GDP declined 5.7 percent. The first look was a decline of 6.1 percent. We'll get a final look in a few weeks.

We're also keeping an eye on GM shares. They had been volatile, to say the least, of course, the nation's largest automaker looks all but certain now to be headed for bankruptcy protection.

GM shares were up by double digit percentages yesterday. Right now, they are down three percent, getting ever closer to a dollar a share. And, finally, Dell -- we're watching Dell shares. Dell reported its quarterly earnings. They recorded a nearly 65 percent drop in its bottom line. But the way Wall Street rethinks, it was actually better than expected.

And what we're seeing in the first few seconds of trading is modest. Modest gains for the three major averages. Dow, the NASDAQ and the S&P 500 each up about a quarter of a percent.

And, Heidi, in the next hour, we are going to be talking to some 10 and 11-year-old, fifth graders from Wisconsin who beat out 1,500 stock picking teams and doubled their money in ten weeks. They will tell us how they did it in the next hour.

Heidi, back to you.

COLLINS: Fascinating. Great piece. I can't wait to see that.

All right, Susan, talk to you a little bit later on. Thanks. General Motors facing a big day on decisions as it prepares for a likely bankruptcy filing on Monday. Today, GM will announce whether it's eliminating its hummer brand. And union workers will finish their vote on reducing benefits. The goal -- tough decisions now could mean a shorter bankruptcy period later.

Well, here's the ownership of GM. What it's going to look like if it files, as expected. The Treasury Department will own more than 72 percent, the UAW, 17.5 percent and bondholders 10 percent. Anyone who owns stock today will find it worthless once the company files.

CNN tonight Ali Velshi and Christine Romans are going to take a closer look at the triumphs and troubles of U.S. carmakers and "HOW THE WHEELS CAME OFF: THE RISE AND FALL OF THE AMERICAN AUTO INDUSTRY." It will air tonight at 8:00 Eastern right here on CNN.

The civilian death toll continues to climb in Pakistan. Taliban fighters are launching attacks outside the heavily disputed Swat Valley. Twelve died in attack in Peshawar yesterday. There were pairs of suicide bomb explosions in a crowded market last night. The day before that, suicide bombers killed 27 people and wounded more than 200 in Lahore.

The Taliban say they are launching attacks in retaliation for the Pakistani military's deadly offensive in the Swat Valley. But those attacks are coming in cities far outside the disputed areas.

CNN's Reza Sayah is joining us now live from Islamabad, Pakistan this morning.

So, Reza, what kind of targets are they actually going after?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Heidi, based on what we've seen this week, the Taliban and these militants are going after major cities, urban areas. Taking the fight out of the Swat Valley where they are taking on the Taliban to these cities throughout Pakistan. And within those cities, you name it, they are going after them.

Of course, Wednesday in Lahore, a massive suicide attack targeting a government compound with the offices of the ISI. Pakistan's top intelligence agency. Yesterday, in Peshawar, you had them going after a security check post. And, perhaps, what's most disturbing, they are going after civilian targets. Yesterday, again in Peshawar, two bombs exploded in one of the busiest and oldest markets in Peshawar, killing six people. Two of them children, Heidi. So no target seems to be out of the reach at this point.

COLLINS: Right. And it seems like, obviously, there's going to be a lot of scrutiny at the tactics here. What types of attack are we talking about, and what about security in these places?

SAYAH: Well, security is there. For the past year we've seen security increase here in the federal capital of Islamabad. Bigger cities like Lahore and Karachi. You see security officers, especially in sensitive areas. But the problem is this strategy of suicide attacks. There is a reason why it's effective.

If you get a teenager, and many of these suicide attackers are teenage boys. If you convince them that the journey to salvation is through killing yourself with one of these suicide attacks, if he is convinced that if he wraps an explosive device around his waist, there is very little you can do to stop him. Somebody is going to get hurt. It's very likely somebody is going to get killed in these attacks. That's what we've been seen in the past 48 hours - Heidi.

COLLINS: All right. Our Reza Sayah, watching the story for us from Islamabad, Pakistan, this morning. Thanks so much, Reza.

A police officer in New York gunned down by another officer. It happened last night in Harlem. Authorities say 25-year-old Omar Edwards was off duty and in plain clothes when he spotted someone breaking into his car. The officer reportedly chased after the suspect with his gun drawn. Officials say that's when another police officer who witnessed the chase fatally shot Omar in the chest and arm.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY, NEW YORK: Tragic accidents like this are another reminder of the dangers our police officers often face as they keep our city the safest big city in the nation. Rest assured, we will find out exactly what happened here, see what we can learn from it so it may never happen again. All the city's prayers are with Omar Edwards and his family.

(END VIDEO CLIP)

COLLINS: The name of the officer who shot Edwards has not been released. Officials say he has been on the force for four years.

Quick look now. Severe storms. That's for sure. Overnight in northern California. That's where you're looking. Lots of lightning as you can see. Plus strong winds in the Fresno area. Emergency crews still out there trying to clear all of the downed trees.

Reynolds Wolf standing by now with a little bit more on this. And a lot of these storms kind of across the country it seems like lately.

(WEATHER REPORT)

COLLINS: Hey, look at this now. This was some of it that happened last night. Thirteen-year-old -- this is not her. Kavya Shivashankar from Kansas is the one who won the whole deal. It's coming up, I think.

The competition started out with 293 spellers ages ranging from nine to 15 years old. It went 15 rounds and came down to this final word. There she is.

(BEGIN VIDEO CLIP)

KAVYA SHIVASHANKAR, 2009 SCRIPPS NATIONAL SPELLING BEE: Laodicean -- L-a-o-d-i-c-e-a-n. Laodicean.

UNIDENTIFIED MALE: We have a champion.

(END VIDEO CLIP)

COLLINS: Laodicean.

REYNOLDS WOLF, AMS METEOROLOGIST: What does it even mean?

COLLINS: Laodicean.

I'm going to know that in just a second, because the little birdies in my ear are telling me...

WOLF: How proud her parents must be. That is the coolest thing to see. And I'll you, as a 39-year-old guy, watching something like that can sure make you feel stupid.

COLLINS: That's my favorite part is when they show the reaction from the parents. By the way, it means lackadaisical.

WOLF: Lackadaisical.

COLLINS: We know something about that, don't we?

WOLF: I don't think so.

COLLINS: Anyway, Kavya is an 8th grader. She won $40,000 in cash and prizes for nailing that word.

WOLF: Brilliant kids.

(CROSSTALK)

COLLINS: Oh, I see...

WOLF: When you get to that point, they're just phenomenal. All of them.

COLLINS: Yes, it's amazing. Love it.

All right. I was actually spellbound, too. Reynolds, we'll check back later on. Because, you know what, we are going to see how the spelling bee champion is doing this morning. Kavya Shivashankar is going to be joining us live at 10:39, to be exact, Eastern, in our next hour of CNN NEWSROOM. So make sure you stick around for that. She's a great story.

Homeless since the age of 8, but not without hope. An Atlanta student defies the odds and now she's got a full college scholarship. She is joining us live to tell us her remarkable story.

(COMMERCIAL BREAK)

COLLINS: All month long, we've been highlighting compelling stories from the Class of '09. But, unfortunately, because of the nature of the news out there, a lot of those reports have been a little discouraging. High school graduates struggling to pay for college, college grads unable to find jobs.

But in our last segment today, we want to end on a positive note. And we have it. It is the inspirational story of a teenager who faced seemingly insurmountable obstacles throughout her life and managed to conquer them all.

Meet 17-year-old Danielle Galloway. She grew up homeless in Atlanta, bounced from shelter-to-shelter and attended ten different schools. But that instability did not throw her off course. Instead, Danielle, threw herself into her studies. And this year, she graduated in the top 25 percent of her class and will attend at Boston University on a full scholarship coming this fall.

And Danielle is here with us live this morning.

Congratulations to you.

DANIELLE GALLOWAY, HOMELESS TEEN WHO WON SCHOLARSHIP: Thank you.

COLLINS: It's a great story. And we love being able to end on a positive note here.

Tell me a little bit about graduation, because you just graduated the other night.

How did it feel?

GALLOWAY: It felt amazing. I enjoyed marching in and hearing people cheer for me, especially the people who has been a part of my life for a while. So it was very exciting. And I'm glad my siblings were there to see me accomplish high school. It's a big goal.

COLLINS: Yes. And I know that you have a lot of siblings, and they mean a great deal to you. Tell us a little bit about your brothers and sisters.

GALLOWAY: Well, I'm the oldest of six. And they all remind me of myself, because when we all were in shelters together, my mom raised us to be close and we love each other very much. And there's Roderick, Deniqua (ph), Ashley, Alexis and Ricardo. And Ricardo is the youngest. He's 4. He's just full of energy and nothing bothers him. And my siblings and I, we are very goal-oriented and we value education a lot. And my brother, Roderick is coming home today from Rabun Gap Boarding School.

COLLINS: Wow. Great.

GALLOWAY: Yes. I think he enjoyed his eighth grade year, and I'm happy for him. And I know he will be the next big person in our family because he wants to be a vet.

COLLINS: Oh, really? Very good. Well, it's great that you talk about your brothers and sisters so much. But this is kind of your time a little bit today, too, because you have been through so much. In fact, you say that a lot of times to escape sort of what was going on in your everyday life, you went to your studies.

GALLOWAY: Yes. Any time I felt like there was something going on in my household that was too difficult to deal with, I just studied and write because it's calming. And it allows me to really be in another place for a moment.

COLLINS: Yes, yes. Understood. Now, you had a couple of mentors that were very, very special to you. And I know it was probably emotional for them as well when you graduated just the other night. I think we have some pictures of them, too. Tell us a little bit more about Miss Buchanan and Miss Isaac.

GALLOWAY: Miss Buchanan is a nurse for the shelters, and I've known her as long as I've known Miss Gingercassin (ph). And I would call her Auntie Connie, because she's always been there. And when I used to go into nurse office, I just wanted to be a doctor so I can answer all the crazy questions and she answered them. And she just made me feel at home whenever I went into the nurse's office.

And I used to be afraid of shots. And she is the only one I would allow to give me a shot. So she just allowed me to be myself and have -- watched me grow, and I thank her so much.

COLLINS: Yes. Well, it's very important to have mentors, obviously, especially when you are moving around like you did and having some of the instability that you had in being in the homeless shelters.

Fast forward. You're going to Boston on a full-ride scholarship. What does that feel like? Can you believe it?

GALLOWAY: When I first heard, I was in Miss Isaac's office.

COLLINS: Oh, good! That's right where you needed to be, one of your mentors, right?

GALLOWAY: Yes. They called me the night before, but I couldn't answer my phone. And so the next morning, I called in Miss Isaac's office and they wouldn't tell her because they thought I wasn't in the room. But once they found out I was in the room, they said, congratulations! And that was just it. So we hung up the phone, and I started yelling. And me and Miss Isaac cried for a moment.

COLLINS: Sure.

GALLOWAY: And I just thanked her because it wouldn't have been possible without her. She nominated me. And from the moment I walked in her office, she let me know she believed in me. And that meant a lot to me, because you don't know me, but you believe in me. And she's just been a remarkable person. I'm thankful for her and her family, because -- and I now live with her sister, Ms. Brenda Isaac.

COLLINS: Oh, really?

GALLOWAY: Yes. COLLINS: All right. Well, so you're going to have this continued support then as you go through your college years, obviously. We want to know what are you going to major in? Because you said you used to want to be a doctor. That not true anymore?

GALLOWAY: No.

COLLINS: What do you want to do now?

GALLOWAY: I plan to major in math.

COLLINS: OK. All right. What are you going to do with that?

GALLOWAY: I have no clue.

COLLINS: Can you fix the economy?

GALLOWAY: I'll try.

COLLINS: OK, because we really appreciate that.

GALLOWAY: Yes, I'll try.

COLLINS: All right. Well, it is a pleasure meeting you. Danielle Galloway, congratulations to you on your graduation and on your continued success. We will watch and wish you the very best of luck.

GALLOWAY: Thank you.

COLLINS: Thanks, Danielle.

And you can catch this interview and more information on our Class of '09 series. On my blog, just check it out at cnn.com/newsroom, and then click on my name.

"Teach for America." It's been compared to the Peace Corps, but this nonprofit group focuses on the American classroom. New college grads hired to work in poor communities, but today's bad times are made for some tough decisions.

(COMMERCIAL BREAK)

COLLINS: Father Alberto Cutie, an internationally known priest is severing ties with the Catholic Church. He was removed from his Miami Beach parish less than a month ago after he admitted to having a romantic relationship and breaking his vow of celibacy. Cutie is now joining the Episcopal Church, which allows its priests to marry.

(BEGIN VIDEO CLIP)

REV. ALBERTO CUTIE, JOINING EPISCOPAL CHURCH: I will always love and hold dear the Roman Catholic Church and all of its members who are committed to their faith and have enriched my life. I have decided to become part of this new spiritual family in the Episcopal Church, one within many in the umbrella of Christianity. As I have been saying and writing for years for my work in communications, instead of focusing on our differences, let's work together so that all may come to believe in a loving and good God even in the midst of this changing world.

(END VIDEO CLIP)

COLLINS: Cutie is scheduled to deliver a sermon this Sunday at his new church, which received him in a ceremony yesterday. But he has to complete other requirements before serving as an Episcopal priest.

A lot happening this morning. And our crews are working hard to bring it to you. Let's check in now beginning with Suzanne Malveaux at the White House.

Hi, Suzanne.

MALVEAUX: Hey, Heidi.

Well, we're waiting for the president. About an hour or so, he'll be unleashing his cyber security policy for the administration, as well as a new post of cyber czar. I'm going to have all of that and much, much more at the top of the hour.

POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: And I'm Poppy Harlow in New York.

What would a GM bankruptcy mean for its lineup of fuel-efficient cars and trucks? We'll have the answers and whether or not it'll have to scale back on its plans for hybrids and electric vehicles. Heidi, that's at the top of the hour.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: I'm Elizabeth Cohen in Atlanta.

What happens when you buy health insurance, but it turns out not to be health insurance? Well, that means you've been scammed. I'll give you tips to avoid becoming a victim at the top of the hour.

COLLINS: Oh, good. We like that.

All right, Elizabeth, thanks, and thank you to Suzanne and Poppy, as well.

Meanwhile, coming up, we're going to meet the young lady who spelled her way to victory. She's joining us right here in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: It is the kind of Peace Corps for the classroom. "Teach for America" is a non-profit group that puts new college grads into poor areas that desperately need teachers. But in these tough economic times, the program can't keep up with the demands either from schools or people needing jobs. CNN's Deborah Feyerick explains.

(BEGIN VIDEOTAPE)

MOLLY GREER, TEACH FOR AMERICA TEACHER: What are different paces that you can go at when you're reading something loud?

Christina?

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): On the first day of school, most of the kids in Molly Greer's eighth grade class could not read at a sixth grade level. With summer almost here, it's a totally different story for these kids who are now back on track.

GREER: It is an incredible thing for these students.

FEYERICK: Greer graduated with honors from the University of Wisconsin. She arrived in the Bronx two years ago with a degree in political science and a desire to change the world.

GREER: When I found out about "Teach for America", I realized that, you know, teaching would be such an incredible way to make an impact.

FEYERICK: ""Teach for America"" is like a local peace corps serving some of the country's poorest inner city schools. It's more popular than ever. 35,000 college seniors applied in 2009. A 42 percent jump from last year. Why? Two reasons says the nonprofit.

KEVIN HUFFMAN, "TEACH FOR AMERICA": We just had less competition from Wall Street firms and banks. It just led a lot of students to really think about what they wanted to do and how they could have an impact.

FEYERICK: This year, ""Teach for America"" placed its largest group ever. 4,000 college grads in places like Boston, Dallas and the Mississippi delta. Even so, schools in Appalachian and elsewhere desperately need help.

HUFFMAN: Districts across the country are facing the same economic pinch that many businesses are facing, and they're just fewer positions available across the country for teachers.

FEYERICK: Which is why the Teachers Union says those positions should go to career teachers, not inexperienced recruits may only stay the required two years.

JOHN WILSON, NATIONAL EDUCATION ASSOCIATION: It's very hard to justify laying off teachers who have, you know, given service to a school system and then turn around and bring in new teachers.

FEYERICK: "Teach for America" says two-thirds of its recruits stay in academics like Molly Greer, who now plans teaching as a career.

GREER: When the kid makes reading growth and they have like the biggest smile on their face, and that feeling that, you know, I contributed to giving that student is like the best compliment. FEYERICK (on camera): "Teach for America" received so many requests for teachers they can hardly keep up with the demand. They are expanding but not everyone is qualified. And, of course, there's always the money issue. Recruits are paid a starting teacher salary from private donors and federal grants.

Deborah Feyerick, CNN, New York.

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