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CNN This Morning

Phoebe Wall Howard is Interviewed about the UAW Strike; Mark Zandi is Interviewed about a Government Shutdown; AI Implants Help Paralyzed Patients. Aired 6:30-7a ET

Aired September 29, 2023 - 06:30   ET

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

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[06:31:59]

PHIL MATTINGLY, CNN ANCHOR: The two-week long auto strike could expand even more today. A union source tells CNN that the United Auto Workers president, Shawn Fain, is set to update members on the state of negotiations at 10:00 a.m. Eastern.

POPPY HARLOW, CNN ANCHOR: And if the union decides there has not been enough progress in these talks, it will announce new targets for the strike, meaning it's going to get bigger. UAW members at those facilities would walk off the job and onto the picket line today at noon.

Phoebe Wall Howard is an automotive reporter for a great publication, "The Detroit Free Press."

Phoebe, it's great to have you. Good morning.

I was so struck yesterday reading this piece you did. You got the transcript of Bill Ford, who had -- not only the president of Ford, he has been at the negotiating table for every union negotiation since 1982. The year I was born. A long time ago! And what he said about politicians was striking. Tell us.

PHOEBE WALL HOWARD, AUTOMOTIVE REPORTER, "THE DETROIT FREE PRESS": Well, I mean, it's one thing for automakers to welcome politicians from both parties, not outside negotiations, but this has just been - this is a really rough negotiation cycle. And I think politicians coming in from both sides of the aisle, it's not helpful. That's basically what they're saying. Things are very difficult behind the scenes. So, making things more difficult in front of the camera is just not helping the process at all. And that's very unlike him.

HARLOW: Right.

HOWARD: He generally doesn't step up and (INAUDIBLE). Yes, very unlike him.

HARLOW: He never does. Part of the quote, he says, "I'm very grateful to our employees for everything they've done and continue to do for our company. What does anger me is the behavior of the politicians. Honestly, it's a circus we don't need because it doesn't help our employees and it doesn't help our company."

HOWARD: Yes.

HARLOW: It is - it is striking, and it's now out there in the public. Is the thought that this will help the negotiations?

HOWARD: Well, I think that right now things are -- you know, we hear things are moving forward. Then they slide backward. And remember, I mean, this is Detroit and this is all over the country. But in - you know, I recently moved back from California. And in Silicon Valley, people were, you know, earning great jobs in tech and they were living in their vans and driving two hours so they could afford housing. Here in the Midwest and other parts of the country, the UAW is saying, that's what we're fighting against.

And so while we're expecting an announcement at noon today, I think it may be different than the past two weeks because also the UAW has just announced that there's a solidarity convoy at noon. They're asking people who have vehicles that are currently out of production, the Bronco, the Jeep, the Chevy -- oh, and the vehicles built in Wentzville.

HARLOW: Cruz? Yes.

HOWARD: No, it's - Chevy Colorado and Canyon. Forgive me (ph).

HARLOW: OK. OK.

HOWARD: And those are the vehicles that are going to meet and do the convoy. So, that tells you he normally does an event that calls for striking at noon, but this is a different thing at noon today.

[06:35:00]

So, we're expecting something unexpected. We don't know what to expect.

MATTINGLY: I feel like that's such a great kind of window into the Fain era and how this is just a different moment than we're used to in these types of negotiations. Is there any sense that the rank and file has any issues, concerns, problems with the leadership, which has been a very different strategy than we've seen before, or is everything still rock solid for Fain and his team?

HOWARD: Base - so, what I do is I walk the strike lines.

MATTINGLY: Right.

HOWARD: And I walk all different strike lines and talk to the workers. I have to tell you, they are standing solid with this man. He's a brand-new leader. Elected in March. And very aggressive. But again and again they say that they believe in the strategy. They believe he's watching their back.

What's interesting is how much they talk about loving these companies. I mean they actually use the word "love." And when I say, how can you love a company and be striking - I mean you're shutting things down -- the union workers say, just now is the time. Now is our time. Just try to, you know, get things back that we've lost and make our way for the future.

MATTINGLY: And Fain's ability to bridge that gap between leadership and still loving the company, it's been -- it's his superpower to some degree.

HARLOW: Yes.

MATTINGLY: And what you're saying, from what you're hearing on the actual picket line, that's so critically important in terms of where things are.

Phoebe Wall Howard, thanks so much for your time. We appreciate it.

HOWARD: Thank you.

HARLOW: That was fascinating. We'll watch what happens at noon especially today.

All right, developing now, though, disturbing claims of racism against Tesla. The Equal Employment Opportunity Commission has filed a lawsuit. They filed it overnight. It alleges the electric automaker allowed repeated and overt displays of racism toward black employees at its plant in Fremont, California. The suit claims racist slurs were often used by non-black employees when speaking to black employees at the factory. This is not the first time these kinds of allegations have been made against that same Tesla facility.

MATTINGLY: Now, earlier this year, Tesla was ordered to pay $3 million after a civil suit by a black elevator operator at the plant claimed he was subjected to frequent racist abuse. CNN spoke with him back when he filed the suit last year.

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OWEN DIAZ, FORMER TESLA EMPLOYEE WHO SUED FOR RACIAL DISCRIMINATION: Even, you know, my experience, I want to say, let it be less about my experience and let it be more about the workers that's going through what they're going through right now, you know, because it's like my experience is over with. I was able to move on. But we still have workers that's there. You know, I've been saying, and I'm going to keep saying, you know, what -- I'm not the only one who said anything.

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MATTINGLY: This most recent lawsuit makes no specific monetary demands but asks that a jury make Tesla pay the alleged victims for the conduct they were subjected to and other damages. Tesla has not responded to CNN emails asking for a response.

HARLOW: We'll keep you posted on where that goes.

Less than 42 hours until the government shuts down. And a new warning this morning about the impact of a shutdown on the U.S. credit rating. And, by the way, could this push us into a recession? All of that straight ahead.

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[06:41:39]

HARLOW: New this morning, the White House warning that a government shutdown, quote, "would deny more than $100 million in critical finances to American small business every day." That's because the Small Business Administration would stop processing those new business loans in a shutdown which now seems all but certain, sadly. It comes as the U.S. economy faces other challenges, big headwinds. The auto workers' ongoing strike, rising oil prices. By the way, you have to start paying your student loans again on October 1st, and the child care cliff that we've been talking about all week.

This week Moody's Investor Services raised the possibility of a shutdown also, if there wasn't enough, hurting our credit rating. So, how much chaos in Washington would damage the economy?

With us now is the chief economist at Moody's, Mark Zandi.

Good morning, Mark. Good to see you.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Good morning, Poppy.

HARLOW: You've put out - you put out this warning, you know, about sort of a credit watch negative. If that actually happens, coupled with all the rest of this, can you just explain what this shutdown is going to feel like for every American?

ZANDI: Well, Poppy, I mean, initially it's not a big deal. I mean we've been through many shutdowns. Twenty-two in all. Eleven of those had government furloughs. So, you know, if it's a few days, if it's a week or two, you know, obviously it's a - it's a problem for those federal employees that are furloughed, but it's not a big deal for the rest of us. If it extends on much beyond that, you know, let's say it goes a month, which was the length of the shutdown back in 2018-19, then things start to happen. You know, it affects - I I'm a home - a potential home buyer and I - and I want to get -- I need flood insurance from the federal government, I can't get that and I can't close on my home. The FDA can't do inspections of food processing plants or pharmaceutical facilities and, you know, that disrupts the food supply. Environmental Protection Agency. You mentioned the Small Business Administration.

HARLOW: Yes.

ZANDI: And then, you know, ultimately some of these furloughed employees -- and essential workers that go to work will stop going to work because they need to make a living. They've got bills to pay. And that's like TSA agents or air traffic control.

So, you know, with each passing day this becomes more disruptive and more of a deal, more of a problem for the economy.

MATTINGLY: Mark, it's an interesting point because, you know, as Poppy laid out, there's so many different factors. And you've gone into detail on all of them and how you've kind of watched this play out and your projections.

One thing I'm trying to figure out, from a bigger picture perspective, as these headwinds exist or threats exist as well, you know, U.S. mortgage rates surging to their highest level in 23 years. You've said that buying a home or car is almost completely unaffordable for a typical American right now.

The U.S. economy has beaten expectations every step of the way in the recovery from the pandemic. Why are we here right now for consumers?

ZANDI: Well, you know, you make a great point. I mean the economy's amazingly resilient. Lots of slings and arrows, but here yet we are with the 4 - a 3.8 percent unemployment rate. Lots of jobs. You know, at this - at this point in time, wage growth is stronger than the rate of inflation.

So, you know, we're kind of managing through both, you know, the - that these headwinds just keep popping up. The UAW strike is - you know, that's an issue with each passing day. The mortgage rates at 7.5 percent, that's an issue. The oil price is now above $90 a barrel. We're paying, you know, more than $4 for a gallon of regular unleaded. And that starts to bite. And then, of course, you mentioned the student loan payments.

[06:45:01]

So, you know, there's just a lot of stuff, you know, happening. Yet through it all the economy remains resilient.

But having said that, you know, we shouldn't do things that we can, that would harm the economy, that we don't need to, like shutting the government down. I mean that may not be a big deal, what's a couple, three weeks, but it could be a big deal given all these other, you know, issues that we're struggling with, all these other headwinds.

HARLOW: Mark, just in terms of advice for what people at home should do, this is what the president of the Minneapolis Fed, who has a vote, by the way, on interest rates, Neel Kashkari, told us this week.

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NEEL KASHKARI, PRESIDENT, MINNEAPOLIS FEDERAL RESERVE: Don't take on more debt right now, you know, would be a big thing. Credit card interest rates have gone up quite a bit. And if you have bigger balances, then it's going to be more and more painful to service those debts. And to the extent possible, have longer-term -- if you have loans, longer-term home loans are better.

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HARLOW: Do you agree with all that for people watching at home?

ZANDI: Oh, sure. You know, I mean interest rates are really high. You don't want to borough money when interest rates are higher, particularly on your credit card because you're going to be paying over 20 percent. And that's - that's a pretty tough financial treadmill to get on. So, just don't do that.

Of course the other thing is, you need to be a good shopper. I - you know, I think, you know, back before inflation took off a couple -- three years ago, we've gotten out of the habit of shopping, being careful about it, because there was no inflation. It wasn't really an issue. But now with inflation much higher, we just have to be much more judicious.

And, you know, businesses pay attention to that. If there's - if people stop shopping because prices are too high, they stop raising prices. So, I think it's really important that we become good consumers again.

HARLOW: Well, that's interesting, our behavior can affect what they chose to do.

MATTINGLY: No, it's a great point, particularly coming out of the pandemic where people had a lot more in their savings.

HARLOW: Yes.

MATTINGLY: The behavioral impact of all this is fascinating.

HARLOW: Yes.

MATTINGLY: Nobody covers it better than you, Mark Zandi, chief economist at Moody's. Thank you, as always.

ZANDI: Sure thing.

HARLOW: Now to this. A new brain implant is creating life-changing hope for people who suffer from paralysis by using artificial intelligence.

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GREGOIRE COURTINE, NEUROSCIENTIST: If you are paralyzed with your hand and you can just open and close, it's a new change. So, then you can eat. You are gaining independence.

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[06:51:22]

MATTINGLY: New technology that's creating life-changing hope for those who suffer from paralysis. A Swiss man who was paralyzed has now miraculously regained some movement using a brain implant that applies artificial intelligence to read his thoughts, ultimate stimulating the correct muscles to make his body move.

CNN's Nick Watt takes a closer look at this incredible development.

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DAVE MARVER, CEO, ONWARD: If you talk to people with paralysis, it's their number one priority. They want to restore hand and arm function even above - they prioritize that above the ability to stand and walk again.

NICK WATT, CNN NATIONAL CORRESPONDENT (voice over): Here's how it works. An implant is placed on the brain above the motor cortex. AI in that implant deciphers intent to move arms, hands, fingers, then relaying that information wirelessly to another implant in the body, so bypassing the damaged spine. AI, in that implant, triggers the right muscles to actually make those movements. They call this thought-driven movement.

Dr. Jocelyne Bloch performed the surgery.

DR. JOCELYNE BLOCH, NEUROSURGEON, LAUSANNE UNIVERSITY HOSPITAL: We remove a little bit of bone. We replace this piece of bone by this set of electrodes. And then close the skin. This implant is going to work wirelessly and activate the spinal cord stimulation.

WATT: Her partner, a neuroscientist, first had this sci-fi idea years ago, then waited for tech to catch up.

GREGOIRE COURTINE, NEUROSCIENTIST: If you are paralyzed with your hand and you can just open and close, it's a new change. So then you can eat. You are gaining independence. The change in the activity of daily living in dramatic. This is why this new product is so exciting.

WATT: We met Bloch and Gregoire Courtine in July to discuss their previous project, another world first, fitting a similar device to this man, who lost the use of his legs after a bicycle accident.

GERT-JAN OSKAM, PARALYZED IN A CYCLING ACCIDENT: Now the implants are able to capture my - my thoughts of walking, and able to transfer it to the - to the stimulator in my lower back.

WATT: But, they say, restoring arm and hand function is actually harder.

MARVER: It's more refined, especially if you want to extend the restoration of movement to the fingers and not just the arms. So, help them grasp something, or help them use individual digits.

WATT: "While it is still too early to provide full results," Onward told us, "we were pleased to report that the technology works as expected and appears to successfully reanimate his paralyzed arms, hands and fingers."

MARVER: We'll learn a lot from that first person. Then we'll expand to four or five people. And then, if that goes well, we'll conduct a global pivotal trial and hopefully get FDA approval and make it available.

WATT (on camera): A lot of work still to do, no doubt. But with these trial surgeries, they have proved that this can be done. Something that many people thought was impossible. Movement can be restored after a spinal cord injury. And so many people could benefit from that. One legal ethicist told me, we have an ethical imperative to continue this research.

Now, we looked into this and a whole lot more for an upcoming episode of CNN's "The Whole Story" that's airing next month.

Phil. Poppy.

MATTINGLY: Can't wait to watch that. It's a great piece. Fascinating.

HARLOW: It's amazing to see the good side of AI, too.

MATTINGLY: Yes. Exactly.

HARLOW: All right.

MATTINGLY: Well, just hours to go before the government shuts down. We're going to speak to a House Republican who opposes the short-term funding bill. What he thinks about a potential move to oust the speaker.

HARLOW: Also, a surprising decision by the former president's legal team that could pave the way for Trump to appear at a televised trial.

[06:55:02]

That's ahead.

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KAITLAN COLLINS, CNN ANCHOR: The government is on the brink of shutting down. House Republicans are essentially at war with one another.

UNIDENTIFIED MALE: It got just a little bit spicy.

UNIDENTIFIED MALE: Troops will not get paid. Border agents, FBI agents, air traffic controllers.

MELANIE ZANONA, CNN CAPITOL HILL REPORTER: Does he turn to Democrats and try to cut a deal with the Senate.

ABBY PHILLIPS, CNN ANCHOR: At the House Republican's impeachment hearings against President Biden, one senior Republican aide calling it, quote, "an unmitigated disaster."

UNIDENTIFIED FEMALE: We are holding this sham hearing days before the government will shut down.

UNIDENTIFIED MALE: Joe Biden abused his public office.

UNIDENTIFIED MALE: They had no fact witnesses, no eyewitnesses.

[07:00:00]

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): This is an embarrassment.

UNIDENTIFIED FEMALE: The case that could spell the beginning of the end for Trump's business empire is starting on Monday.

UNIDENTIFIED FEMALE: Donald Trump, Donald Trump Jr., Eric.