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GM Begins New Chapter; Protests Continue in Iran; Spotlight on Prescription Drug Abuse; U.S. Marines Advance in Afghanistan; Payment After Affair
Aired July 10, 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: Happening this hour, the new GM revealed. The automaker announcing it's now out of bankruptcy.
And compared to Iwo Jima, an Afghan village taken back from the Taliban. We've got a live report for you straight from Afghanistan.
Plus, pool closed to campers. A Pennsylvania swim club now fighting charges of racism. It is Friday, July 10th. Hi, everybody, I'm Heidi Collins, you are in the CNN NEWSROOM.
The new General Motors, any minute now we should be getting details about the automaker's move out of bankruptcy. It came pretty quickly too. The majority owner now, though, the U.S. government.
GM's future beginning with more castoffs from the past, as in new job cuts to be talking about. We are looking at live pictures out of Detroit right now, awaiting for Fritz Henderson, GM's, of course, chief executive officer, getting ready to speak. You see all the cameras getting set up right there.
As soon as he begins talking, we, of course, will bring it to you just seconds away. In the meantime -- oh, here we go. Let's go ahead and go straight to him.
UNIDENTIFIED MALE: The photographers, take your seat or move back a little bit. We'll get started.
Good morning, everybody. And good afternoon and good evening for those of you who are joining us from other parts of the globe. Welcome to -- once again we're coming to you from the General Motors headquarters at the Renaissance Center in Detroit.
We have some very important announcements to make this morning. We only have a short amount of time so we'll get to them very quickly. You will have a chance to ask questions, obviously, in the room, but also for those of you on the phone. When you're ready you can push star one and cue up to ask a question.
And also those of you who are online have the ability to send us their questions, as well. So, without any further ado, we'll get started. Let me present Fritz Henderson, president and CEO of General Motors.
Fritz, take it away. FRITZ HENDERSON, CEO, GENERAL MOTORS: Thank you, Steve. Thank you very much. Let me add my welcome to Steve's. Thank you for joining us this morning.
It's an exciting day for General Motors. Today marks the beginning of a new company, our company, one that will allow every single employee, including me, to return to the business of designing, building, and selling great cars and trucks, and serving our customers.
There's nothing that we want to do more than that.
A lot of people thought we couldn't move through the 360-sale process as fast as we did. I want to thank everyone involved for a truly amazing effort to make it happen. From the GM team, our team of excellent advisers, and most importantly to the U.S. and the Canadian government, the automotive task force, and the taxpayers in the U.S. and Canada who have been the key part of making this happen.
We deeply appreciate the support we've received during this historic transformation, and we'll work hard to repay the trust and the money that so many have invested in GM. The last 100 days has shown everyone, including ourselves that a company not known for quick action can in fact and indeed move very fast.
Starting today, we want to take that intensity, the decisiveness and the speed of these last several weeks and then transfer it from the battlefield triage of the bankruptcy process to the day-to-day operation of the new company. And this will be the new norm at General Motors.
All of you have copies of our press release, so I won't go into any detail about the make-up of the new General Motors. Instead, I'd like to talk for a few minutes about my three priorities for the new GM. Three very simple ones. Customers, cars, and culture. And let me take them in that order.
First, customers. And I placed them first because they need to simply be our top priority, our only priority in many ways. At the new GM, we need to make the customer the center of everything, and we're going to be obsessed with this, because if we don't get this right, nothing else is going to work. It's that simple.
With the quality gap substantially eliminated, one of the new frontiers in the automotive industry, we think is going to be customer service, true customer service, which makes it that much more important that we make the customer the center of our universe.
We're committed to listening to our customers, responding to consumer market trends, empowering the people of General Motors who are closest to the customer to make decisions, and seek opportunities every day for direct communication between our customers and employees at every level starting with me.
Next week, we're launching a "Tell Fritz" Web site for our consumers or anybody actually to share their ideas, concerns, and suggestions directly with the senior management. I'll review and respond to the input every day.
Of course, other executives and I will continue to reach out to customers through our ongoing electronic communications. Starting in August, thank goodness, I'll go on the road every month to meet with consumers, dealers, suppliers, employees, and others in the U.S. and abroad who directly impact our relationship with customers and key partners.
And I'll be asking other members of my management team to do the same. This is something that I've done throughout my career and I can assure you I welcome this opportunity again.
Together and individually, we need to listen to the questions, ideas, and concerns of the people who matter most. Those are the people who own and drive General Motors cars and trucks. And use that information to build better cars and trucks and provide better levels of service going forward.
I am personally committed to being closer and more available to consumers than ever before. More importantly, we're determined as a leadership team to make GM owners the most excited and loyal consumer base in the industry.
Our focus on consumers will also extend beyond GM, through GM, and through our great dealer network. With a significantly leaner and healthier network both we and our dealers will be able to focus more resources in providing customers with the best level of service.
Our dealers have committed to making the changes necessary to improve the total customer experience for GM vehicle owners. We're working on new ways, for example, to make car buying even more convenient for consumers. Including an innovative new partnership with eBay, for example, in California, an experiment, if you will, which is intended to potentially revolutionize how people might actually buy vehicles online.
Consumers will actually be able to bid on vehicles just like they do in an eBay auction, including the option of choosing a predetermined buy-it-now price. Think of it as a physical auction for dealers reinvented for the online consumer. We'll be testing this and other ideas with our dealers over the next few weeks and hope to expand and build upon them in the coming months.
In all cases, our goal is to make the shopping and buying process as easy as possible for GM customers on their time and on their terms. Stay tuned.
Second major focus for GM that I have -- that we have as a leadership team is really simply about cars. As I've said many times in the last 100 days and I frankly said throughout my career, there's never been a successful turnaround in the global automotive industry without a focus in both the cost and revenue sides of the business. You get to -- you have to do it on both sides.
To win, we need to stabilize and, in fact, grow our business around the globe and particularly here in the United States. And that means building more of the gorgeous, high quality, fuel efficient cars, trucks, and crossovers that consumers want and getting into the market faster than ever before.
Toward that end, we plan to launch 10 vehicles in the U.S. and an initial 17 outside the U.S. actually over the next 18 months. We are going to drop the word competitive from our vocabulary in the area of product development.
Going forward, our aspiration, our objective, and the objective of Tom Stevens, the entire product development organization, is to create products that consumers can judge as best in class and anything less is just simply not acceptable as an aspiration.
We may not always reach this level. But if we don't set that level for ourselves, we won't accomplish our goals. And the goal is to have -- our vision is clear, to design, build, and sell the best vehicles in the world, something that General Motors has known for many years ago and something we need to reestablish.
One way we'll achieve this goal is by focusing on, for example, in the U.S., four core brands, Chevrolet, Cadillac, Buick, and GMC. And populating these four brands with just 34 name plates next year down from 48, getting every name plate right. This emphasis on fewer better entries will enable us to devote more engineering and marketing resources to each model, like the products we're launching in the U.S. this year.
Vehicles like the smoking hot Chevrolet Camaro and the Equinox, Chevrolet Equinox, the Buick Lacrosse, the GMC Terrain, Cadillac SRX and our CTS Sport Wagon. And you'll see in the products we're launching around the world the same sort of passion. Cars like the Chevrolet Viva in Latin America, the Chevrolet Cruze and Buick Excelle in Asia Pacific, and the Opel Astra coming this fall in Europe.
I should add that a key part of our product focus is a continued emphasis on environmental technology. We're road testing preproduction Chevrolet Volt, extended range electric vehicles, now. We plan to bring the car to the market before the end of next year.
We announced a new small car last month to be built right here in Michigan. It will add to our growing portfolio of U.S. built, highly fuel efficient vehicles and restore about 1,400 direct jobs in this country and many more indirect jobs, in this country and our home state of Michigan.
This was a business decision. It's about producing fantastic, beautiful, small cars and earning a return on it with highly competitive manufacturing facilities and labor agreements.
We're making advance battery development a core competency for the new GM. You can expect additional news later this summer. We've already made a number of important announcements, and we will continue to bang the drum, to make sure that we get our job done in terms of advance battery development.
In short, the products and technologies we're launching this year and next are clear demonstrations of our long-term commitment to an exciting design, great fuel efficiency and world class quality.
These are the cars, trucks, and crossovers that will put us back on the consumer shopping list and the road to profitability and success.
Finally, we're working to change -- we must change the culture of GM. With a focus around customers and products, speed, accountability, and risk taking. There's a lot of work to do here, and we need to start at the top. We have a new board of directors, General Motors, led by our new chairman, Ed Whitacre, who's with us here today. And I've asked Ed to come up and make a few remarks.
Ed, please. Welcome, Ed.
COLLINS: All right. In the middle of this transition, here now over to Ed Whitacre, who is the new chairman at the new GM, if you will. We were just listening to Fritz Henderson, the -- of course CEO of General Motors, announcing several new changes and changes in policy, changes in language, even challenges in some vehicles.
Let's bring in our Christine Romans, part of our CNN Money Team, who has also been listening to all of this.
A few surprises here for me, anyway, Christine. We had heard, of course, that this is going to be happening today, this announcement, coming out of bankruptcy. We were expecting Fritz Henderson to say hey, this is what the new GM is going to look like. But he kind of went about it in a different way and he started talking about these three priorities which are customers, cars, and culture, right?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, this is a company looking forward and this is -- executives of this company have been leery of using the word bankruptcy, really, for a long time because it's not something that they want to...
COLLINS: All about the positive, yes.
ROMANS: Yes -- no, I mean, they are launching a new GM, and that's what this press conference is all about. It's about exiting bankruptcy officially and launching the new GM. The new GM with these three focuses, as you pointed out, customers, cars, and cultures.
But the new GM, some call it Government Motors, because you own 61 percent of it, American taxpayers.
COLLINS: Yes.
ROMANS: There will be fewer brands, and there will be a sleeker, leaner company, Chevy, Caddy, GMC, and Buick, and he pointed out the smoking hot Camaro. He's already pumping one of his particular cars.
This is a company that has reinvented itself in 40 days and now has to prove, Heidi, that it can really compete and hold on to market share. Market share has been shrinking for this company for some time. Ford is, frankly, has been doing, you know, eating into some of its market share. Ford hasn't had to take any of the government loans that GM had to. So there's GM's market share. You can see it has declined steadily since 1980.
So, this is a much smaller company than it used to be. And this is a CEO of this company who is trying to look forward and talk about the new General Motors, what it's going to look like and how it is going to succeed, Heidi.
COLLINS: Yes. Talking about those new cars, I guess, 10 domestic new cars they're going to be launching?
ROMANS: That's what he said. And some of them will be small cars. But you know -- and I want to be very clear. 20 or 16 plants and facilities and 20,000 workers will not be a part of this new GM.
COLLINS: That's right.
ROMANS: And a lot of debt will not be a part of this new GM. So they have left an awful lot behind, including some other brands that are either sell or dismantle. So the new GM is much leaner, but that means that over the next month and even next year or so, some of these plants will be closing down.
COLLINS: Yes. No question about that. All right. Well, we are continuing to follow that story, obviously, as usual right here on CNN.
Meanwhile, we also have the Treasury secretary, Timothy Geithner, talking today. So, Christine, break us down all of that if you would because it's the derivatives or the counter derivatives.
ROMANS: Yes.
COLLINS: Make it make sense for the people at home.
ROMANS: OK. You're going to hear a lot about OTC derivatives.
COLLINS: Yes.
ROMANS: These are over-the-counter derivatives. They are not traded on an exchange, they are not regulated. But the global market for this is like $450 trillion. That is way bigger than the world's stock market.
So these are things that are traded between companies, between third party investors and the like all around the globe that are not regulated and in some cases we don't know how much risk they could be posing for certain companies.
COLLINS: Exactly.
ROMANS: Companies like AIG that might be important to the American or world economy. So the treasury secretary wants to see some smart, focused regulation of over-the-counter derivatives for the first time ever. He's going to be testifying about that.
Now, look, these are not corn futures. Corn futures are regulated by the Commodity Futures Trading Commission. They're on an exchange. These are very complex financial swaps and derivatives that are traded among banks.
COLLINS: Yes. Let me know some of their worth.
ROMANS: And in some cases it's very difficult to know what the -- what the fallout would be of -- the cascading effect of some of these things. So they want to be able to have a better picture of this. And for many, many years, this market has grown wildly with very little supervision. The treasury secretary would like to change that.
COLLINS: Yes. All right. Well, we'll be watching all of that, as well.
Christine Romans, thank so much...
ROMANS: Sure.
COLLINS: ... for handling a variety of topics this morning.
(LAUGHTER)
And we want to remind everybody that that Capitol Hill hearing with Timothy Geithner begins at the top of next hour. We're going to keep an eye on it for you and bring you any new developments from there.
Meanwhile, four weeks ago, they headed for the polls, and ever since thousands of Iranians have poured into the streets in a show of defiance. Can the reformists force change in Iran?
REYNOLDS WOLF, CNN METEOROLOGIST: And Heidi, it's been yet another day of record heat across much of the nation. Coming up, I'll let you know if that heat wave is going to last us the weekend. That's only moments away. See you then.
(COMMERCIAL BREAK)
COLLINS: In Iran, days of relative calm shattered as protesters once again defied the government. Thousands of demonstrators headed towards Tehran University. That's the site of a student uprising 10 years earlier. Of course you may remember, in 1999. Again, they were pushed back by pro-government militia and riot police firing tear gas.
Protesters are outraged over the outcome of Iran's presidential election, which they say was rigged. We've been telling you about this for weeks now. In fact, hundreds of people have been arrested, but protesters say they are not giving up.
CNN's Reza Sayah has been monitoring all of the developments from over here at our Iran desk.
So, yes, this is heating once again.
REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Yes, and we hadn't seen street protests in about 11 days, but I think a lot of the demonstrators took advantage of that 10-year anniversary and hit the streets again.
COLLINS: Yes.
SAYAH: We've been getting new video in throughout the overnight hours. Let's go ahead and show it to you here at the Iran desk. This is one of the pieces of video that came out overnight. This gives you an idea of how many people turned out on the streets. Nowhere near the numbers we saw in previous weeks, but based on eyewitness accounts so we're saying about 3,000 people showed up.
They tried to gather at Revolutionary Square about 5:00 p.m. local time yesterday. That's where they were met with thousands of security forces according to witnesses. The security forces managed to keep them out of that location, but they didn't quit. They went neighboring streets, neighboring areas, lots of aggressive chants, chants of death to Khamenei, the supreme leader, death to the dictator.
And one chant we hadn't heard before.
COLLINS: Yes.
SAYAH: And this is significant.
(SPEAKING FOREIGN LANGUAGE)
Mojtaba is Ayatollah Khamenei's son.
COLLINS: Right.
SAYAH: There's been a lot of reports that he's taken over the basij, and that the supreme leader, his father, is grooming him to be the next supreme leader so a lot of chants directed at him.
Things quieted down over night, at 10:00 p.m., the chants of Allahu Akbar, started once again, in some neighborhoods, louder than before. But the first street protest we've seen in a while, about 11 days.
COLLINS: Yes, absolutely. All right. Well, we are going to continue to follow that. In fact, we're going to be talking a little bit later on, Reza, with someone who has a view inside, if you will.
He's an author and a scholar, and like you, actually witness some of thee protests in Tehran. So he'll be coming up in just a little while talking a little bit more about the government's show of force.
Meanwhile, the Michael Jackson investigation. We're going to have the very latest on that for you coming up in just a little while. The surprising statistics and some of the alarming consequences, as well. We're back in a moment right here in the CNN NEWSROOM. (COMMERCIAL BREAK)
COLLINS: An update on the Michael Jackson investigation now. Detectives are looking into his prescription drug history, as you well know by now. There is speculation, though, that prescription drugs, especially sedatives, could have played a role in Jackson's death.
L.A. police say they have spoken to doctors who have treated Jackson over the years, but they're still waiting on toxicology tests to determine a cause.
(BEGIN VIDEO CLIP)
CHIEF WILLIAM BRATTON, LOS ANGELES POLICE: Are we dealing with homicide? Are we dealing with an accidental overdose? What are we dealing with? We'll wait to see what the coroner comes back with, and then once he comes back with his determination, we'll be able to speak to in a much clearer and very open way what our course of action will be.
(END VIDEO CLIP)
COLLINS: A source close to the family tells CNN the Jackson family knows the investigation could turn into a criminal case.
The Michael Jackson case is putting the spotlight on prescription drug abuse. It's a serious problem that affects lots of people from all walks of life so that we thought we'd talk a little bit more about it today.
Our senior medical correspondent Elizabeth Cohen joining me now.
Let's first put it in perspective, I think, Elizabeth, would be important. How bad is this problem?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: The problem is very bad. It's sort of like the elephant in the room. I think many, many families can relate to what happened to Michael Jackson. Maybe not quite in those proportions, but prescription drug abuse now, unfortunately, is a factor in many people's lives.
In 2008, last year, the CDC said the prescription drugs replaced heroin and cocaine as the leading drugs involved in fatal overdoses. And that's in cities, that's in rural areas, that's all over.
Let's take a look at some really startling statistics. From 1999 until 2004, overdose deaths from drugs like Vicodin and Demerol and OxyContin went up 142 percent.
COLLINS: Cheese.
COHEN: Again that's overdose deaths from opiate, which are those drugs that you see there. What's interesting during the same time period, overdose deaths from heroin went down 9 percent. So what you're seeing is that prescription drugs, which many people, Heidi, think of as, well, how bad can they be? A doctor prescribes them, right?
COLLINS: Yes.
COHEN: Are in fact highly, highly abused and highly, highly dangerous.
COLLINS: Well, yes, because the doctor may prescribe them, but they also tell you how many to take and when.
COHEN: Yes, exactly. That's right.
COLLINS: But in talking a little bit more about this, how do people get a hold of the stuff? Because I think we hear about these prescriptions that, you know, eventually run out and usually the ones that are highly addictive like some of the ones you just mentioned, you can only get so many of them. And still it seems like people are able to work that system?
COHEN: Right.
COLLINS: Yes?
COHEN: And people -- right. Exactly. They work the system. That's a good way to put it. People do things like doctor shopping so you go to Dr. Smith, say my back hurts, you get a prescription for an opiate like Demerol or Oxycontin, and when Dr. Smith is kind of like, hmm, this seems a little strange, you move on to Dr. Jones.
So, that's going on and they're trying to put some controls in there so that that can't happen, but that does happen. But also what happens is that people are prescribed these drugs for legitimate reasons. They don't take all of them. They put them in their medicine cabinet and then their kids go and take them from the medicine cabinet and then somebody else, some other kid goes and gets it from their family, and then the drugs get traded.
COLLINS: Yes.
COHEN: Also the Internet. There was a study done by the Center of Alcohol and Substance Abuse. They found that half of all Internet sites would sell you drugs like OxyContin just by faxing a prescription. And you know you can make up faxes.
COLLINS: You can certainly do that.
COHEN: Yes, yes.
COLLINS: Yes, no question. I imagine there are treatment programs, though, for prescribed drug abusers, if you will, just like alcohol and illegal drugs as well?
COHEN: There are. But they are expensive. There aren't as many of them as there should be, and it's also interesting that this is a good thing, is that prevention programs have moved on to start including messages about not overdosing on prescription drugs.
It used to be that the -- they just say no things were all about illicit drugs.
COLLINS: Yes.
COHEN: But now they're starting -- you can see here is where a kid is talking about all these different drugs...
(CROSSTALK)
COLLINS: Great commercial.
COHEN: It's a very powerful commercial, very powerful PSA where he says oh, yes, this is for my hysterectomy and this for my...
COLLINS: Yes.
COHEN: Yes, and look what he's selling to his friends.
COLLINS: Scary.
COHEN: Exactly.
COLLINS: No question. All right. Our senior medical correspondent, Elizabeth Cohen, thank you. An important issue. Thank you, Elizabeth.
Also, it has been compared to Iwo Jima. An Afghan village taken back from the Taliban. We've got a live report coming straight out of Afghanistan in a moment.
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COLLINS: To Wall Street now. We are looking at a lower open for stocks on this final trading day of the week, with a spotlight focused on the nation's largest automaker and its rebirth. GM, of course, we've been talking about it all morning.
Stephanie Elam is in the New York Stock Exchange now with more on the early market action, which includes a lot of clapping right now, Stephanie. Good morning.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: A lot of clapping for sure. An exciting start to the day, but we have a lot going on, Heidi. The major averages are set for a lower start this morning after the Dow managed to edge up just four points yesterday.
Once again, focus is on General Motors. In the last couple of hours we've learned that GM has indeed exited from chapter 11 bankruptcy protection. The move comes after a six-week journey for the automaker. The U.S. government will now own more than 50 percent of GM.
Meanwhile, tempers are flaring today. And of course that AIG may be preparing to pay out millions of dollars in bonuses to dozens of top executives. Various media outlets say the insurance giant has been talking with a newly appointed Washington compensation czar about the bonuses which could be paid out next week. And also in Washington this morning, Treasury Secretary Timothy Geithner is expected to propose new regulations on over-the-counter derivatives because they are so difficult to place a value on and to monitor.
The administration is encouraging greater use of standardized contract. In the U.S., four large banks control over 90 percent of the derivatives market.
So, with all of that in mind, let's take a look at where the numbers start, and we're right in the red. The Dow off 54 points, 8130, NASDAQ off 6 at 1746 at this time.
And in about 30 minutes, we'll await the latest reading on consumer sentiment. Analysts expect the index to have dipped in June from the previous months as investors remain jittery about spending their money. That's something we hear a lot about, Heidi.
COLLINS: Oh, yes, yes. Everybody jittery about spending their money these days.
Stephanie Elam, sure do appreciate that. We'll check back with you next hour. Thanks.
We are expecting President Obama's arrival in Rome shortly on his way from meeting with Pope Benedict at the Vatican. The president wrapped up his first G summit last hour with a news conference. The summit ended with a pledge of $20 billion over the next three years to increase food production in developing nations.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Wealthier nations have a moral obligation, as well as a national security interest in providing assistance. And we've got to meet those responsibilities. The flipside is is that countries in subterranean Africa and elsewhere in the world that are suffering from extreme poverty have an obligation to use the assistance that's available in a way that is transparent, accountable, and that builds on rule of law and other institutional reforms that will allow long-term improvement.
(END VIDEO CLIP)
COLLINS: After meeting with the pope, the president heads on to Ghana, and our Anderson Cooper will be meeting up with him there. You can watch his special on "AC360" Monday night at 10:00 Eastern.
(COMMERCIAL BREAK)
COLLINS: Senior U.S. officials tell CNN the Obama administration is willing to hold talks with Taliban commanders holed up in northern Pakistan. The officials say Pakistan has offered to broker the talks aimed at negotiating a cease-fire in Afghanistan.
In exchange, the Pakistani government wants the U.S. to use its influence to reign in Pakistan's main military rival, and that would be India. Pakistanis accuse India of supporting arm separatist within their borders. Senior U.S. officials tell CNN the U.S. is willing to raise those concerns with India.
Two U.S. Marines are dead in fighting in southern Afghanistan. Both were killed fighting the Taliban in Helmand Province. The first week of the expanded offensive there has been largely successful, with the Marines taking new ground.
CNN's Atia Abawi was with those troops in Helmand Province.
(BEGIN VIDEOTAPE)
ATIA ABAWI, CNN INTERNATIONAL CORRESPONDENT (voice-over): Flying with the U.S. Marines into an area of Helmand Province that was once considered Taliban land. Just five days after operation Strike of the Sword began, the governor of Helmand stepped into a district that he could not before because it was too dangerous.
Raising the Afghan flag over Khanashin District, a symbol of new governance and change. It was a moment that was likened to Iwo Jima by Marine Brig. Gen. Larry Nicholson. A moment that they hope will symbolize a turn in the war here.
(on camera): This castle was built in the 1700s during the time of King Dorani the father of Afghanistan. For the past several years, this castle in this district was occupied by the Taliban. But today the U.S. Marines and the coalition forces gave it back to the government and the people of Helmand Province.
For the past three years, Khanashin was under strict Taliban control. Now this district of around 2,000 waits to see what its future holds. Some hopeful, but many skeptical. They have seen this all before. Coalition forces coming in and quickly leaving, and the Taliban always making their way back. But this time, the troops and the government promise to stay and build institutions and most importantly trust.
GOV. GULAB MANGAL, HELMAND PROVINCE, AFGHANISTAN (through translator): I tried to reassure the people that until our own Afghan forces can stand on their own two feet, the international forces will help us.
ABAWI: Although the people believe the governor is a kind man, this village elder points the finger at him, still distrustful of the intentions of the Afghan government.
Villagers in Helmand like the ones here have in the past turned to the Taliban for protection. Feeling at times it was their only own choice. But the forces hope to show these men that there is an alternative to their current less than rudimentary existence.
GEN. MAYAHADEEN GORI, AFGHAN NATIONAL ARMY (through translator): You can see with your own camera what terrorism is and what al Qaeda is. You can see a deficient school, a deficient clinic, deficient district, deficient roads. People don't have the matter or means of living. ABAWI: And although troops haven't met much resistance yet, General Nicholson warns this is only a week into the operation. And like the villagers, the Taliban have their own expectations.
BRIG. GEN. LARRY NICHOLSON, U.S. MARINE CORPS: So perhaps the Taliban is also expecting us to leave. And I think once they understand that we're not leaving, I think in some cases they will test us, they will come back at us and they will try to get back to the population.
ABAWI: And it's the population who will have to choose. A decision that will determine the country's future.
(END VIDEOTAPE)
COLLINS: And Atia Abawi is joining us now live from Kabul, Afghanistan.
So, Atia, this has been a costly week for the U.S. military, as well, in Afghanistan. But wondering what you're noticing from the Afghan people by way of their thoughts on this new effort by the U.S. marines.
ABAWI: Well, Heidi, we have to remember that this area, Khanashin District, that has been handed back to the Afghan government is also an area where they have seen coalition forces before. They have been promised before that these coalition forces would stay and help, but there wasn't enough manpower back then and then they left. And these villagers had to deal with the Taliban. Those who did side with the coalition, they were punished. And right now they're skeptical. They're waiting to see if these U.S. marines, these coalition forces in the Afghan government will actually hold on to their promise.
And what we heard from General Larry Nicholson with the U.S. Marines says that are there to stay, that they are there to build institutions and to build trust, and to prove to these villagers that they are the choice rather than the Taliban.
Heidi?
COLLINS: All right, Atia Abawi, watching all of it from the ground there in Kabul, Afghanistan. We sure do appreciate the update.
And as a reminder, the casualties do punctuate a deadly week for U.S. troops across Afghanistan. A total of 11 died in attacks this week alone. The bodies of several of those killed in action this week arrived at Dover Air Force Base.
Joint Chiefs Chairman Admiral Mike Mullen was there to honor the fallen. 643 American troops have died in action in Afghanistan since operation enduring freedom began in 2001.
Almost relatively quiet now in Urumqi, China. Major mosques remain closed today in the wake of violent demonstrations there. At least 156 people were killed. More than 1,000 injured on Sunday. That's when ethnic tensions erupted, between the Uighurs who predominantly are Muslim and China's Han majority.
Nearly one month after the election in Iran, the protests may have slowed down a bit, but they certainly are not over. We'll take a closer look at what's going on in Iran and the impact it may have on the country's president.
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COLLINS: Disturbing allegations of racism are being investigated this morning at a private swim club. African-American and Hispanic children from a summer day camp reported hearing racial comments when they went swimming at the Valley Swim Club. The club is located in a mostly white suburb near Philadelphia. The camp director says the club canceled their swimming privileges and refunded the camp's nearly $2,000. The club denies any allegations of racial discrimination. Its director told a Philadelphia TV station the children, quote, "fundamentally changed the atmosphere at the pool."
So, we are very curious to know what you think about this story. We are certainly inviting you as always to check out our blog page. Go over to Heidi Mac here, and you can get on at cnn.com/heidi.
You see a bit of a synopsis here of the story. Why are these black kids here quote, "African-American children turned away from a private swim club?" Once again all happening in Philadelphia. So we will stay on top of that and welcome your comments. Once again, cnn.com/heidi. And we're back in a moment right here in the CNN NEWSROOM.
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COLLINS: Nearly one month after the vote in Iran, protests are still going on, as you can see there as well as here in the U.S. Students filled the streets of Washington yesterday rallying for Iran.
And the nearly 3,000 protestors took to the streets in Iran, some getting into clashes with police. I want to talk more about that now. This situation, the very latest in, and American Foundation journalist Afshin Molavi is joining us to give us a little bit more insight here.
We continue to get the pictures in. We continued to hear of these protestors, Afshin. But yesterday we heard some chanting, I think that we haven't really heard before talking about death to Khamenei, the supreme leader. We've heard similar comments to that before, but not against his son. Tell us a little bit more about that relationship and why people of Iran would be so concerned about the son of Khamenei, too.
AFSHIN MOLAVI, FELLOW, NEW AMERICAN FOUNDATION: No, absolutely. That is a new chant, as your correspondent Reza Sayah pointed out. You know, Mojtaba Khamenei, the son of the Supreme Leader Ayatollah Khamenei. The supreme leader, as you know, has virtual veto power over all matters of state. And Mojtaba has been essentially the chief of staff to the supreme leader's office, essentially running his office. But they also, the story that has he merged in Iran over the past couple of days is that Mojtaba Khamenei has taken over the hard line Basij militia and he has been the kind of the master mind behind this crackdown on protestors.
And, you know, from the very beginning of the election dispute, there were many in Iran who are saying that Mojtaba was the man behind this massive rigging of this election, as well.
So, in a way, this man, Mojtaba Khamenei, who had been working behind the curtain to use a Persian term has been exposed. And I think that's quite significant.
COLLINS: Yes, very interesting. Does that make the supreme leader himself Khamenei less powerful?
MOLAVI: I think the supreme leader Khamenei has certainly been diminished by all of these events over the past month. The supreme leader likes to think of himself as an arbiter, as a balancer between different factions. He generally was never really much of a balancer. He did lean towards the conservatives. But in this particular instance, he overtly went behind a particular presidential candidate Mahmoud Ahmadinejad in the pre-election period and in the post election period, as well.
And many of Iran's senior clerics, some of the grand ayatollahs have disputed Ayatollah Khamenei publicly. So he's certainly a diminished individual.
COLLINS: Yes. I wonder then, though, because we have learned here that obviously the supreme leader seems to be the one who was really calling the shots over the president and talking about Mahmoud Ahmadinejad, we've always known that. So if the supreme leader is losing a bit of his power, if you will, what does that say for the President Ahmadinejad?
MOLAVI: Now, I think, I think both men are certainly diminished by these actions now. You know, the important point to remember, however, is they still have the instruments of coercive force at their disposal. So, while they may have lost a certain amount of legitimacy within the institutions of the Islamic Republic, to put it brutally, they still have the guns. And they still have the forces at their disposal.
And so, while we're paying a lot of attention looking at the cracks within the ruling structure of the Islamic Republic, one thing we need to look at very closely is are there any cleavages within the securities services? Thus far we haven't seen any and thus Ayatollah Khamenei and Mahmoud Ahmadinejad still maintain that kind of power.
COLLINS: OK. OK, good point. I do want to ask you quickly before we let you go, though, about something that one of our other guests talked about this week. This is from the University of Florida, Mohsen Milani.
He said that he expected to see some type of reshuffling of Ahmadinejad's cabinet. In fact, he went so far as to say that possibly he would be considering bringing in some of the opposition members to that cabinet.
What are your thoughts?
MOLAVI: You know, I would find it, you know, hard to believe that Ahmadinejad would bring in any of the serious opposition members. But I know, you know, Mohsen Milani well. And he's an excellent scholar. And I think his larger point is that Ahmadinejad and Khamenei are going to try to walk this back a little bit. Because at the end of the day, they realize that the system is in crisis, and they're going to need to bring in some of the more reform-minded forces. But I think what they'll probably do is bring in some of the more pragmatic conservatives rather than the more serious opposition forces.
COLLINS: More of an appearance sort of move to understand.
MOLAVI: Absolutely.
COLLINS: All right, Afshin Molavi, we sure do appreciate your time here today. Clearly this is not over and we will continue to follow it here at CNN.
Thank you.
MOLAVI: Thank you.
COLLINS: Cover-up allegations levelled against a pair of U.S. senators. Nevada's John Ensign admitted he had an affair, but now the husband of his mistress says there is much more to the story.
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COLLINS: An update now on a story we first told you about yesterday. Four people are charged in connection with an alleged scheme to dig up graves in an Illinois cemetery and resell the plots.
Investigators say more than 300 graves were emptied. Earlier police thought it was only about 100. They found bones and headstones scattered in another part of the cemetery. This has been, as you would imagine, an emotional scene for family members who want to know if their loved ones were moved. The FBI, forensic scientists and local funeral directors are helping with the investigation.
Certainly a lot going on in the next hour of NEWSROOM, and CNN crews are in place now to break it all down for you. Let's begin this morning with Ed Henry straight from Rome.
Hi, there, Ed.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, hello, Heidi. President Obama about to arrive at the Vatican behind me for his first audience with Pope Benedict, but first he wrap up his time in the G-8 Summit by getting a little emotional about his father's ties to Africa on the eve of his first visit to Ghana as president. I'll tell you what got him emotional in just a few moments. ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: It's "Empower Me Friday," and today we're going to help you fight your insurance company when they refuse to pay. I'll have that at the top of the hour.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi, I'm Gerri Willis. In a rough job market you need to use any kind of edge you can to land a position and now many job seekers are tweeting their resumes. I'll have that at the top of the hour.
COLLINS: OK. Very good. Thanks, guys.
Also, a swim club in Philadelphia facing accusations of discrimination. A group of children say they were turn away because of their race.
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COLLINS: $96,000 for mental anguish. That's the amount paid to a woman and her family who had an affair with Nevada Senator John Ensign. Now her husband is speaking out.
CNN's Brian Todd has the story.
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BRIAN TODD, CNN CORRESPONDENT: (voice-over): Three weeks after Senator John Ensign admitted to an affair with a campaign aide whose husband worked in his office, new information and allegations of a cover-up.
Speaking publicly for the first time, Doug Hampton, Ensign's former administrative assistant, whose wife, Cindy, was treasurer of the senator's re-election campaign, says on the Nevada political program, "Face To Face with Jon Ralston," that his wife received a hefty severance payment when she stopped working for the senator.
JOHN RALSTON, HOST, "FACE TO FACE WITH JON RALSTON": He paid severance to your wife out of his own pocket?
DOUG HAMPTON, FORMER ADMINISTRATIVE ASSISTANT TO SEN. JOHN ENSIGN: To my knowledge, that's correct.
RALSTON: How much?
HAMPTON: That, I don't know.
RALSTON: You don't know?
She's your wife.
Was it more than $25,000?
HAMPTON: Absolutely.
RALSTON: A lot more? HAMPTON: Yes.
RALSTON: It was a lot more than $25,000?
He's got some serious issues, because that was never disclosed, do you understand that?
HAMPTON: (INAUDIBLE).
TODD: But Ensign's attorney tells CNN that payments to Doug and Cynthia Hampton were made last year, but by Senator Ensign's parents, who were concerned about the Hamptons' well being.
In a statement on the senator's behalf, his attorney says: "In April 2008, Senator Ensign's parents each made gifts to Doug Hampton, Cindy Hampton and two of their children in the form of a check totaling $96,000. Each gift was limited to $12,000. The payments were made as gifts, accepted as gifts and complied with tax rules governing gifts. None of the gifts came from campaign or official funds, nor were they related to any campaign or official duties. Senator Ensign has complied with all applicable laws and Senate ethics rules."
It's not clear at the moment whether campaign finance law has been violated by these payments. But analysts say the reemergence by Hampton and discussion of money being exchanged do little to put Senator Ensign's political problems to rest.
STU ROTHENBERG, ROTHENBERG POLITICAL REPORT: You have allegations -- did he pay hush money, how much did he pay, why did it pay it?
These are all questions that could -- could -- could develop and could further engulf him as a political figure.
Dough Hampton also says in the interview that Republican senator Tom Coburn of Oklahoma who earlier confronted Ensign about the affair to try to stop it believe the Hamptons deserve restitution.
(on camera): But Senator Coburn categorically denies suggesting that any payments be made to Doug and Cynthia Hampton.
Brian Todd, CNN, Washington.
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