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New York Transit Workers Union Board Votes to Return to Work; Over 1,000 Spaniards Celebrate El Gordo Lottery Win; Employee Information Stolen From Ford Motor Company

Aired December 22, 2005 - 15:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: TWU Union Chief Roger Toussaint now talking to reporters. We're going to listen in. If you've just tuned it, TWU voting in favor of getting its workers back on the job while the negotiation will continue for a new contract. Let's listen in.
If you're just tuning it, we're waiting for Union Chief Roger Toussaint to start his news conference here. Board members, New York transit workers to resume work. Just getting ready to begin, executive board of the Transit Workers Union, here's its chief, Local 100 voted to go back to work.

Let's listen in.

(JOINED IN PROGRESS)

ROGER TOUSSAINT, PRESIDENT, TRANSPORT WORKERS UNION LOCAL 100: ... and all working people in New York, I'm pleased to announce that the Local 100 executive board just voted overwhelmingly to direct transit workers to return to work immediately and to resume bus and subway service throughout the five boroughs of New York City.

We thank all riders for their patience and forbearance. And we will be providing various details regarding the outcome of this -- this strike in the next several days.

Thank you. Appreciate it.

(CROSSTALK)

QUESTION: When do -- when do they go back?

QUESTION: How quickly will they go back?

QUESTION: What day? Today?

TOUSSAINT: They will go back right away.

QUESTION: Right away?

UNIDENTIFIED MALE: Thank you. Thank you.

PHILLIPS: Well, that was short and to the point.

Union chief there, Roger Toussaint, just coming forward, saying that he is happy, obviously, the executive board of the Transit Workers Union happy that they voted 36-5 to send New York transit workers back to work.

According to the union chief, he says it will happen immediately.

Allan Chernoff, I wonder how quickly immediately is.

(LAUGHTER)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Well, a city as big as New York, immediately does not mean this very moment.

Obviously, first of all, people have to get to their jobs. And keep in mind, a lot of the transit workers, they typically would take the subway or the bus to work. They don't have that option right now. So, it's going to take them a little longer to get to work in the first place.

Then, they have to get things started up again. Getting buses on the street, that's not so complicated -- but the New York City subway system, quite complicated. There are switches throughout the system that have to be coordinated and checked. It not going to happen right away. Hopefully, it will happen before the rush hour tomorrow morning -- Kyra.

PHILLIPS: Now, of course, this still doesn't mean that they have resolved the dispute. So, that means negotiations will continue.

Let's just go over again what exactly the concerns are on behalf of the union and what they want in this new contract.

CHERNOFF: Right, tough negotiations here, first of all, the most important issue -- or the issue that seems to have led to the strike, pensions.

And under this framework that the mediator did broker, it seems that the MTA, the Metropolitan Transit Authority, will take pensions off the table for the moment. They're not permanently taking it away. They're just going to see if they can find cost-savings elsewhere. The area where they're going to focus, health insurance. Of course, that's the other area where costs have been exploding. And the MTA has been maintaining that it just needs to cut costs, because it is going to be facing a deficit.

But a big problem here is that the MTA currently has a billion- dollar surplus. On the day before the actual strike, the MTA board voted to spend that surplus, and it didn't spend that money on the workers directly. And that was one very contentious issue here -- Kyra.

PHILLIPS: Allan Chernoff, thank you so much.

And, of course, we're waiting for Mayor Michael Bloomberg to step to the podium. We're expecting a live news conference with him at any moment. We're also going to speak live with New York's governor, George Pataki, this hour about the deal that has been reached thus far. As you can see, events are moving quite quickly in the New York transit strike, and, so, eventually, for the first time since Monday, will New Yorkers. Within the past hour, if you're tuning in, the union's board got on board an agreement by their leaders to return to work while negotiations continue over pension and health care costs, as Allan mentioned.

Even though a deal has been made where workers will go back to their jobs, they still need to resolve the issue of a new contract. And that is over pension and health care costs. That's no token gesture, though, for seven million computer -- or commuters, rather, who have been cooling their heels, shall we say, and other body parts on frigid sidewalks for three days now, though no one knows how long it might take to get all of the city's buses and trains up and running again.

The union chief, Roger Toussaint, did come forward to the cameras and say, we can hit it immediately; we are ready to go back to work.

And, Allan, of course, it's hard to gauge, like you said, how quickly you can get various forms of transportation up and running, whether it's within a couple hours, before people start heading home. But it seems like, overnight, and by early morning, for rush hour time, things should be good to go.

CHERNOFF: Right.

That's really what's critical here. Everyone going into work today did not anticipate that they would have their normal form of transportation to go home. But, tomorrow, certainly, people would expect it, since at least we do have the strike coming to a close here.

So, hopefully, that will be the case -- Kyra.

PHILLIPS: What about the impact on the economy? Have we been able to crunch the numbers, Allan, bringing it up to today? We have talked so much with those that own restaurants, dry cleaning companies, you name it, who had to literally close shop, because workers couldn't get in, and they can't service anyone.

CHERNOFF: Right.

Well, all the numbers, of course, are estimates.

The city itself said that it would be losing at least $400 million per day. The comptroller of New York City said that, by today the number had exceeded $1 billion. Keep in mind, the comptroller's office is separate from the mayor's office here in New York.

So, businesses, large and small, have been hurt, not just retailers, but also, of course, major corporations, lots of companies had many employees who were not able to make it into work. People came in late, had to leave early. So, in all various forms, businesses have suffered, and especially small businesses. Many independent business people were not able to get to their clients, and vice versa, the clients not able to meet.

So, it's really been a tremendous hassle here, in addition to the -- in addition to the personal effort that people have made. Lots of people have been commuting more than two hours, three hours, walking as much as 10 miles, perhaps some people even more than that. But I have spoken with a number of people who did have 10-mile walks to work.

PHILLIPS: Perfect segue, Allan Chernoff, as you're kind of guiding us through this decision that has been made. You mentioned those that had to hoof it to work. It's obviously not impossible to navigate Manhattan.

But if you want to navigate south of 96th Street in a car, you will need four people. And that kind of puts fourth guy in the diver's seat, while the other three spin their wheels.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Let's go.

UNIDENTIFIED MALE: Every day, it's harder and harder to do. And it's harder to get home. The traffic is worse.

UNIDENTIFIED MALE: Let's go. Let's go.

UNIDENTIFIED MALE: It's a disgrace. You know, they should lock every transit worker up.

UNIDENTIFIED MALE: Four or more occupants per vehicle.

UNIDENTIFIED MALE: (INAUDIBLE) I can find just one. I got to...

UNIDENTIFIED MALE: Sorry, sir.

(CROSSTALK)

UNIDENTIFIED MALE: Four is four. That's the rules.

UNIDENTIFIED MALE: Please. I need to work.

UNIDENTIFIED MALE: I will keep walking. It has affected my income. I'm totally behind the union. I think they're courageous people.

UNIDENTIFIED MALE: It's been pretty hectic. I have already broken up with my girlfriend because of this at 4:00 in the morning. So, we are -- we're going to see what the rest of the day takes us. But, yes, this is pretty hectic, man.

UNIDENTIFIED FEMALE: I need one more rider.

UNIDENTIFIED MALE: (INAUDIBLE) going to 55th.

UNIDENTIFIED MALE: (INAUDIBLE) 55th.

UNIDENTIFIED FEMALE: (INAUDIBLE) going to 55th. OK. Come on.

UNIDENTIFIED MALE: I'm unemployed. And, right now, I'm trying to help people get across 96th street, if they need a fourth person. Only thing I'm basically asking for is just $2 to help them get across.

(CROSSTALK)

UNIDENTIFIED MALE: (INAUDIBLE) It's $2.

UNIDENTIFIED MALE: All right. Get in. Get in. Get in.

UNIDENTIFIED MALE: The mayor said that New Yorkers are resourceful people. So, I'm putting it to the test.

UNIDENTIFIED FEMALE: I can't do anything but basically go to work and go home. I can't go to my chiropractor, because he's totally on the East Side. I probably have it better than other people, because at least my company is providing bus service.

Thank you.

UNIDENTIFIED MALE: So, you made it.

UNIDENTIFIED FEMALE: I made it.

UNIDENTIFIED FEMALE: I just came here for a quick visit, right in the middle of a strike. So, I had a friend drop me off 96th Street, hoping I was going to find a couple other people to hop in a cab with.

UNIDENTIFIED MALE: Ma'am, if you want, you can go up (INAUDIBLE) about two blocks (INAUDIBLE)

UNIDENTIFIED FEMALE: This is fun. Oh, thank you.

UNIDENTIFIED MALE: I need one more person.

UNIDENTIFIED FEMALE: OK.

Is there a way I can get a -- somebody?

UNIDENTIFIED MALE: You know the deal? (INAUDIBLE) $2 to help get across? OK. Thank you very much.

(END VIDEOTAPE)

PHILLIPS: Hopefully, things are going to calm down a bit now.

You kind of got a feel for what life has been like for New Yorkers while dealing with this transit strike. The good news is, we have gotten word now that a deal has been made, that workers will go back into the system and be back at work, could be by the end of the day, or possibly tomorrow morning, before rush hour.

We're waiting for the mayor of New York to step up to the mikes, talk about this deal that has been made.

And -- and, just to let you know, this is, of course, just the executive board of the Transit Workers Union voting to send New York transit workers back to work, while continuing, with the Metropolitan Transit Authority, to work out a new contract -- at issue, pension, pay, medical benefits.

We are going to talk about it all right after the break -- the governor also joining us live.

(COMMERCIAL BREAK)

PHILLIPS: Waiting for the mayor of New York to step to the podium.

We're also expecting the governor of New York to join us live here on our show before the end of the hour, talking about the fact the executive board of the Transit Workers Union, the TWU, Local 100, voted 36-5 within the past hour to send New York transit workers back to work, while talks will continue for a new contract.

So, we will bring you both of those gentlemen live, as soon as they step into place.

We're going to talk about some other news right now, while we wait for them. A U.S. Marine is being investigated in Italy in the death of an Italian secret service agent. That agent was shot dead by U.S. fire near a checkpoint in Baghdad last March. It happened shortly after he secured the release of an Italian journalist held hostage in Iraq.

He was taking the reporter to Baghdad Airport, when their car was fired upon. And the U.S. military said the car was going fast enough to alarm troops at that checkpoint. Well, this morning, State Department spokesperson Sean McCormack said that the death of the agent is a closed matter, so far as the U.S. is concerned.

(BEGIN VIDEO CLIP)

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: There was an investigation into this tragic incident. The U.S. and Italian authorities joined together in that investigation. I don't think that there was a shared conclusion, based on the -- the facts that they were able to uncover.

This was a tragic, tragic situation. But, as far as we are concerned, the matter is closed.

(END VIDEO CLIP)

PHILLIPS: An Italian government report in May blamed U.S. authorities failing to signal that there was a military checkpoint just ahead on that road.

It's China's second major environmental accident in a month, and the two are very similar. A metalworks has spilled toxic levels of cadmium into the water supply serving one of the most populous regions of China. The poisonous slick is heading toward the city of Guangzhou, home to seven million people. Officials there are rushing to protect the water quality. A chemical spill last month shut down drinking water in another large city for nearly a week.

Entire nations are stockpiling it. Patients are begging their doctors for it. Internet scammers are selling bogus versions of it. But what if Tamiflu isn't all that it's cracked up to be in the face of bird flu? Today's "New England Journal of Medicine" reports that four of eight patients treated for bird flu in Vietnam died, despite the use of Tamiflu.

In two of the deaths, treatment may have been started too late. But, in the other two patients, tests show that the H5N1 virus had actually developed resistance to Tamiflu, made by the Roche drug firm in Switzerland.

A senior official at the World Health Organization says the indications of Tamiflu resistance are not necessarily the cause for alarm, that more research is needed. He added that some resistance is inevitable with any drug, and using doses that are too small -- of course, that's too short -- can contribute to the problem.

Health officials in Vietnam say, until there's a better alternative, they are still recommending use of Tamiflu as soon as possible and at higher doses in suspected cases of bird flu.

As we noted before, Tamiflu is not a cure for bird flu, but may reduce the severity and duration of that virus.

Once again, developments in the New York City transit strike -- we are waiting to hear from Mayor Michael Bloomberg. And we are expecting to hear from New York Governor George Pataki. We will bring it to you live, all of it.

Stay with us.

(COMMERCIAL BREAK)

PHILLIPS: As the Transit Workers Union comes to a deal to send its workers back to the job, while talks continue with the Metropolitan Transit Authority about a new contract, we are waiting for Mayor Michael Bloomberg of New York to step up to the podium.

And that could be actually right now. You kind of get a -- a feel for these things when you see, you know, the folks come to the door and the reporters start chatting. So, it looks good. Hopefully, he is going to come to the podium soon.

As soon as we take that, we will listen to what he has to say. And then the governor of New York, George Pataki, is also going to join us live this hour, talking about what he thinks about the strike that took place, this recent deal that has been made, and also the future of a new contract.

Meanwhile, it's party time in a town in northeastern Spain. They're saying "Merry Christmas" 612 million times. That's because every first-prize ticket in a $2.4 billion lottery were sold right here. The 200-year-old lottery is called El Gordo, or "The Fat One." And, this year, all 1,700 first-prize tickets were sold by the lottery office in the town of Vic. That's about 40 miles just north of Barcelona -- or Barcelona. Maybe I ought to say that right.

Each winning ticket is worth $360,000.

Well, when we heard $2.4 billion in the Spanish lottery, the immediate question was, why are the winners getting so much less than in big U.S. lotteries? Here's what we found.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The largest lottery jackpot in world history to go to a single ticket was in Oregon, just two months ago. An extended family divided $340 million in the Powerball drawing.

Powerball and most other lotteries in America don't really compare to Spain's El Gordo. The odds of winning the big jackpot in Powerball are one in 146 million. This makes it tough for there to be even one winning ticket and rare for there to be two or more.

The Powerball system is designed to have lots of rollovers, large jackpots, and single winners. Spain's lottery is different. It's designed to intentionally spread the winnings out. Seventeen hundred tickets are issued for each possible five-digit winning combination. So, when the winning numbers are drawn, it's inevitable that 1,700 ticket holders will have hit the jackpot and diluted the big prize.

(END VIDEOTAPE)

PHILLIPS: Grand theft auto, not the popular video game, but a description of what may be happening to thousands of Ford Motor employees.

Chris Huntington, live from the New York Stock Exchange, to explain.

Hey, Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Kyra, hi.

Well, these stories, unfortunately, have a familiar ring. Ford Motor informed about 70,000 active and former white-collar employees of the company that a computer with company data, including names and Social Security numbers, was stolen.

Ford says the PC was taken at the end of last month. But, so far, there's no evidence that there has been any identity theft or misuse of employee information. Ford also informed the FBI, the Secret Service and the Federal Identity Theft Task Force, as well as three major credit agencies.

The news comes just one week after Ford told its white-collar workers and retirees that it would cut their health care benefits. Ford stock, by the way, is slightly lower today.

Well, sometimes, these stories have happy endings. Yesterday, a missing computer tape with the names and Social Security numbers of two million workers at ABN AMRO bank, and customers, was found at a DHL facility in Ohio. ABN AMRO had publicly announced the tape was missing just last Friday.

Well, turning to Wall Street, stocks are extending yesterday's gains, amid strength in the technology sector. Let's take a look at the latest numbers -- the Dow industrials right now -- give you a shot of the Big Board -- up 47 points, as you can see, the Nasdaq composite up better than 10 points. That's nearly half-a-percent.

But shares of the supermarket chain Albertsons are down nearly 4 percent. "The New York Times" reported that Albertsons unexpectedly rejected a nearly $10 billion takeover bid and ended talks with the buyout group.

That is the latest from Wall Street -- Kyra.

PHILLIPS: Chris, thanks so much.

By the way, Chris, how are you going to get to work tomorrow?

HUNTINGTON: I'm counting on the subway, Kyra.

(LAUGHTER)

PHILLIPS: Amen.

All right, Chris Huntington, thanks so much.

Coming up right after the break, or shortly after, we are hope -- we hope -- Governor George Pataki is going to join us live to talk about the deal that has finally been reached in New York.

As you know, the TWU voted in favor to put its workers back on the job, while they continue negotiations to hammer out a new contract. Those talks will resume now with the Metropolitan Transit Authority. Still, a lot of questions remaining. We're also waiting for New York Mayor Michael Bloomberg to step up to the podium. So, we will take that live as soon as it happens.

We will take a quick break -- more LIVE FROM right after this.

(COMMERCIAL BREAK)

PHILLIPS: Well, just in case you haven't heard, the good news is out.

New York transit workers will be back on the job -- don't know if it will be by the end of the day or by rush hour tomorrow morning, but the good news came around about -- about an hour or so ago. The executive board of the Transit Workers Union Local 100 voted 36-5 to send New York transit workers back to work, while talks will now continue with the Metropolitan Transit Authority. Obviously, this doesn't resolve the dispute. Talks are still going to continue about pension and health benefits and pay for these workers. But at least the decision was made that they will go back on the job while those talks continue. We're waiting for Mayor Michael Bloomberg to step up to the mike. We are going to take that live as soon as he enters the room. We are also going to talk with New York Governor George Pataki.

He's with us live in our bureau. He will talk to us after the mayor steps up to the podium and gives his live news conference.

But, once again, if you're just tuning in, we got the good news within the past hour that transit workers will be back on the job.

Allan Chernoff has been covering this story for us for a number of days, as well as hoofing it to work in the bitter cold. The good news is, Chris Huntington, Allan says, that, hopefully, he will be taking the subway tomorrow.

How about you?

CHERNOFF: Well, if I have to do our early, early morning shift, which I have been doing the past few days, I think I'm going to have to take a car.

And, actually, I have been taking that car before 5:00 a.m., about 4:00 a.m., to get in before the restriction that New York City has had, that restriction being that you have to have four passengers in the vehicle coming into Manhattan, if -- if you are coming in any time after 5:00 a.m., all the way from 5:00 a.m. to 11:00 a.m., that only one of the restrictions that people have been living with during the -- strike.

PHILLIPS: Allan, here we go -- the mayor stepping up to the mike. Let's listen in.

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: Well, good afternoon to everyone.

I'm pleased that the TWU executive board has followed the recommendations of its leadership the New York state mediators and voted to return to work. Based on that vote, the New York City transit authority is asking its workers to report for their next shift, which begins at 4:00 p.m., in a little more than a half-an-hour from now.

Keep in mind, we have an enormous mass transit system that serves the seven million riders in the city, and it can't be turned on or off with a flip of the switch. There are a lot of logistics that need to be dealt with in order to get the subways and buses moving again. The Transit Authority will need something between 10 and 18 hours after workers show up to get the system up to full capacity.

But we would expect buses to be running later this evening, and, hopefully, most subways in the morning. We will know later this afternoon what type of worker turnout there is. And assuming it is big enough to get the system up and running expeditiously, we hope to end the city's contingency plans, all of them, as of midnight tonight.

As for today and this morning, it's rush hour. Sadly, it was marred by a serious injury. An off-duty firefighter was hit by a bus in Midtown as he biked to work. He was taken to New York Hospital. His condition is grave. And I ask all New Yorkers to pray for him.

Other than that accident, the rush was similar in numbers to yesterday's numbers. There were slightly more cars crossing East River across the East River bridges and more people per car. And that's good news.

Nine-one-one call volume still slightly higher than normal, but response times are holding steady. And school attendance today is slightly higher than it was yesterday.

On the economic front, the news continues to be negative. I was in Brooklyn this morning, where I had breakfast with some members of our business community there and heard firsthand how difficult the strike has been for them and for their employees.

It is something that is really very sad. Particularly, the people who are struggling to make ends meet were very badly hurt by this work stoppage.

As I said yesterday, the New York City Blood Center is in a state of emergency and desperately needs donors. You can get information through 311 or by visiting www.nybloodcenter.org, and I encourage every one to help. We want to make sure that we have an adequate blood supply for people that have needs for an emergency operation, because of an accident or anything else.

On a brighter note, it is a great time of the year in New York City. And we have a lot of tourists who are visiting, people who stayed through the transit strike of '05 and will have a lot to talk about for years to come. These people are enjoying our great Broadway shows.

As you know, Christmas is on Sunday and there's still plenty of time for people to shop and to see the tree at Rockefeller Center or ice skate in Central Park, or in Bryan (ph) Park, and enjoy the holiday season here.

It is the greatest city in the world and nobody does Christmas like we do.

Many of our cultural institutions, in response to the current situation, have been very badly hurt and they are currently offering discounts on tickets or gift shop purchases to patrons who present a metro card. Participants include the Alvin Ailey American Dance Theater, the Metropolitan Museum of Art, Theater Works USA, the Brooklyn Museum, Repertorio Espanol, the American Museum of Natural History, the Museum of Jewish Heritage and the Whitney Museum.

A list of all the organizations participating in the Metro Card Cultural Discount Program can be found on the Department of Cultural Affairs' Web site, www.nyc.gov, or call 311. When the subways and buses start running again, things will get back to normal and we hope our economy will get back on track.

And let us hope that we can salvage the rest of this week. Friday and Saturday are great days to go shopping.

One thing is clear, and I want to talk about this a little bit, this was really a very big test for our city. And I think it's fair to say we passed the test with flying colors. It wasn't easy. And certainly serious economic harm was inflicted. But we did what we had to do to keep the city running and running safely.

Public safety was our first priority, and I'm happy to say it was never in jeopardy.

I would like to thank the Office of Emergency Management, led so competently by Joe Bruno, for developing a very effective contingency plan, as well as our Department of Transportation, police department and fire department with their great commissioners, and other city agencies for doing everything that was needed to make this city work.

I'd be happy to take a few questions.

Sir?

QUESTION: Yes, Mr. Mayor.

Do you, looking back at it, have any regrets over how it was interpreted your phrase, "the leadership of the TWU has thuggishly turned their backs on New York City," and the meeting that followed up with that? Do you feel bad about how that was taken at all?

BLOOMBERG: You'll have to talk to the media about what they want to do.

I described the behavior of the union leadership, which hurt the city, and I've been careful to save my criticism for the leadership of the union and I stand by everything that I said.

I have said positive things about the rank and file. You can check the transcript. And I think the rank and file did act responsibly. They were told to go out.

But it was the leadership that I was talking about, and their behavior, and I have no regrets whatsoever.

QUESTION: Mayor, the TWU's message to its workers today was to return to work with their heads held high.

Do you agree with that sentiment? And how do you think the public should treat the motormen and conductors, some of whom they're very angry with after three days of (INAUDIBLE)?

BLOOMBERG: I've been taking the subway since I came to New York City in 1966 and as I have said repeatedly, I think the subway system gets better and better with time. It is clean. It is safe. It is reliable. It is reasonably priced in the context of what everything else costs this day. And it's because of the workers that provide the services, the people that clean the stations, the people that sell metro cards, the people that drive the trains and the buses and all of them.

And I think that the public might be -- if you want to say something to one of the MTA employees as you go by, what about the words, "Glad you're back, I missed you"?

Sir?

QUESTION: Would you, or will you support amnesty (INAUDIBLE) for the union leadership or for union members themselves?

BLOOMBERG: Well, the -- it's really not up to the mayor.

The two-day penalty for every one day that you miss work is in the law and nobody can suspend that. That's something that has to be imposed. The fines that the judge imposed are up to the judge. They're certainly not up to me. And I don't know how he's going to feel.

The judge has the responsibility of ensuring that when a judge issues an order, people follow it. We are a country of laws. And he may very well feel that he wants to, and continue, to impose that fine given that he was -- his -- a direct order from the judge was deliberately flaunted. But that's up to the judge. You'll have to talk to him.

PHILLIPS: Mayor Mike Bloomberg addressing reporters right now.

Right there he's talking about the fact that the union violated New York's Taylor Law. That's the law that forbids public employees to walk off the job. But as you know, the union chief came forward and said -- actually gave this quote, that "there is a higher calling than the law, and that is justice and equality." That's how he tried to reason the breaking of that law when indeed the union went on strike.

Allan Chernoff joining us. He was also listening to the mayor there.

The mayor saying that 4 p.m. he expects employees to report to their shifts, Allan. But we're talking about 7 million riders and a lot of buses, a lot of subways. He did say probably buses and that subways will be up and running before rush hour tomorrow morning.

So sounds like within the next 24 hours things should be A-OK.

CHERNOFF: That's right. It is going to take some time to get that subway system back.

Keep in mind, we have 468 subway stations here in New York City, 660 miles of track. It is a huge system. And I don't even know how many signals, maybe nobody knows exactly how many signals, switches.

A lot of work has to be done to make sure that everything is in order.

PHILLIPS: OK.

Allan, I'm being told that the governor is going to join us in a few moments. So let's talk a little bit until we can get him in place, possibly take a quick break before we do that.

Let me ask you about the mayor still seeming pretty frustrated. It wasn't like he was coming forward and saying, "Isn't this great news?" It seems like he still is very upset with the leadership of the union. He was even asked by a reporter, "Do you take back anything that you said when you called this strike selfish, when you referred to the workers as thuggishly turning their backs on New York City?" And then the question was asked, "How do you think commuters should treat workers tomorrow?" And he said, "You should say, hey, great to have you, you know, good to see you back."

It'll be interesting to see just the relationship between union chief Roger Toussaint and the leaders of New York City, and then how commuters do deal with these workers come tomorrow.

CHERNOFF: Well, I think the commuters are just going to be happy to have everybody back on the job, have their trains and their buses in service. That's really what people want.

And people know that the transit workers do work hard.

With regard to that thuggish issue, there is a lot behind that question because the union had referred to that thuggish phrase by the mayor as being somewhat racist. The union saying, "Look, the majority of our membership, they are black, they are Latino. Look who's running the city." They tried to make this into a racial issue.

And Roger Toussaint, the leader of the union, even had referred repeatedly to Rosa Parks, saying that if Rosa Parks had not broken the law way back, then he said, "many of us would still be sitting in the back of the bus instead of driving the bus."

So the union leader here really has tried to make this a bit of a racial issue. The mayor does not take to that very kindly. And the mayor has been very firm in his criticism of the union.

PHILLIPS: Allan Chernoff, thank you so much.

We're going to take a quick break and then talk to the governor of New York right after this.

(COMMERCIAL BREAK)

PHILLIPS: Well, 'tis for season for old St. Nick to make his rounds. And the guy gets around, let me tell you. Visitors to an aquarium in Tokyo this week get to see Santa passing out goodies to the fish and stingrays. Mr. Clause would be smart to watch out for Mr. Jaws, wouldn't you say?

Regular viewers of LIVE FROM know that all week we're taking a closer look at the biggest Christmas songs of all time. And today, a holiday fave we just can't stop humming. Sure, it gets on some nerves after a while, but, hey, we can't stop.

UNIDENTIFIED MALE (singing): ... everyone telling you be of good cheer. It's the most wonderful time of the year.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): If you enjoy parties for hosting and marshmallows for toasting and much mistletoing..

UNIDENTIFIED MALE (singing): It's the most wonderful time of the year.

PHILLIPS: ... then Christmas is the most wonderful time of the year.

UNIDENTIFIED MALE (singing): .. and everyone telling you be of good cheer, it's the most wonderful time of the year.

PHILLIPS: The song was written by Edward Pola and George Wyle back in 1963. Wyle was the music director for Andy Williams' popular variety show at the time, and wrote the song especially for Williams. Since then, "It's the Most Wonderful Time of the Year" has become a timeless classic. This year, it ranks number 12 on the world's largest performing rights organization's list of most popular holiday songs.

The tune has been recorded by many artists, including Johnny Mathis, Garth Brooks and Amy Grant. But the Andy Williams original remains a favorite.

UNIDENTIFIED MALE (singing): It's the most wonderful time of the year.

PHILLIPS: During the hap, happiest season of all.

UNIDENTIFIED MALE (singing): ... and hearts will be glowing when loved ones are near. It's the most wonderful time of the year the most wonderful time of the year

(END VIDEOTAPE)

PHILLIPS: Hey, you ain't Magno (ph)?

UNIDENTIFIED MALE (singing): It's the most wonderful time of the year.

PHILLIPS: Magno, can you hear me?

UNIDENTIFIED MALE: Yes.

PHILLIPS: You can? OK, I just have to tell our viewers. You know, we've had our photographer down there finding folks to sing for us as we go to pieces. And you work there at the Starbucks down...

UNIDENTIFIED MALE: I do.

PHILLIPS: Right? Down here in the CNN Center.

UNIDENTIFIED MALE: Right here.

PHILLIPS: Where the heck did that voice come from? Hello! Do you produce professionally?

UNIDENTIFIED MALE: Well, I was a theater and a voice major in college, so.

PHILLIPS: Oh you were?

UNIDENTIFIED MALE: Yes.

PHILLIPS: And so what happened to the career?

UNIDENTIFIED MALE: I'm still pursuing it. This is my part time gig, so...

PHILLIPS: OK, Good. So you're still working it. Any deals in the process?

UNIDENTIFIED MALE: We've got a few on the table. We're just waiting for the right one to pick up.

PHILLIPS: All right, sing us to break, then. Here's your chance, pal. Forget "American Idol."

UNIDENTIFIED MALE: OK.

PHILLIPS: Go ahead, Magno.

UNIDENTIFIED MALE (singing): It's the most wonderful time of the year. With the kids jingle belling and everyone telling you be of good cheer, it's the most wonderful time of the year.

(COMMERCIAL BREAK)

PHILLIPS: Well, it's been a rough couple of days for the seven million commuters in New York City. As you know, we've been following the transit strike. But the good news is, a deal has been reached and those workers will be going back as late as this afternoon. 4:00 p.m. is the shift that the mayor has said he wants them to attend to, now that they've reached the deal. Negotiations still going to continue. But, you know, this has outraged a lot of people, politicians and commuters.

New York Governor George Pataki has even blasted the transit workers for striking. He joins me now, though, with his impression on the U-turn here that we've been following. Governor, nice to have you with us.

GOV. GEORGE PATAKI, NEW YORK: Well, Kyra, it's nice being with you, particularly this afternoon now that the TWU has announced they're going to end this illegal strike. PHILLIPS: Well, let's -- and I want to get to your frustration in a moment and some things that you have said. But were you surprised that this strike happened?

PATAKI: Yes, I was, because we've had tough negotiations. The city's had tough negotiations with unions over the course of more than the last decade, but no union has taken the extraordinary step of breaking the law. And this is the first time this has happened in decades. And it was very unfortunate. It made all New Yorkers go through some difficult times that could have been avoided and should have been avoided. And there are consequences for breaking the law, and I'm sure that they're going to be imposed.

PHILLIPS: And Taylor's Law is what we're talking about, which forbids public employees to walk off the job. Real quickly, the background on Taylor Law?

PATAKI: Well, the Taylor Law was passed more than a generation ago because public employees, particularly those in critical services, have the ability to not just cripple a city or a community, but to truly threaten the health and safety of people simply by not working. You can't have police or firefighters not show up to work.

And in a city like New York, you can't have transit workers not show up to work. It is the lifeblood of the metropolitan area. So the law gives them benefits, but in return for those benefits, they are not allowed to strike. It is illegal. There are very real and automatic penalties if you break the law. Unfortunately, the TWU did and now -- no one is above the law, and the consequences are going to be real.

PHILLIPS: Well, Union Chief Roger Toussaint had come forward with regard to that issue of breaking the law and he had said, quote, "There is a higher calling than the law and that is justice and equality."

Do you agree with the -- with his statement in that he said, he had to do whatever it took because he was feeling that he, along with the workers, were not receiving a just salary, just benefits, just pension plan or for that matter, it was not of equal standards.

PATAKI: Kyra, respectfully that's just ridiculous. The MTA put a tremendously fair offer on the table: significant raises over three years, more than 10 percent. No existing employees would have had any changes to their health care or pension system. They would have been given a new holiday. It was a very fair offer.

And while the TWU isn't obligated to accept that offer, they are obligated not to break the law and to remain at the table and continue negotiating. They chose not to do that. I'm pleased now that they have come back -- and let me just say, first of all, Kyra, I'm so proud of New Yorkers again.

When you lose mass transit in a city like New York, it poses enormous hardships. And yet the millions of New Yorkers have come through and stood together and just as we did in blizzards and in blackouts and of course on September 11th. I think we've shown the rest of the country that even under adverse circumstances, New Yorkers are tough, resilient people who can get about their daily lives.

So, I'm proud of New Yorkers. I'm very pleased that the strike is now over. I just wish it hadn't happened. It was illegal. There are consequences for illegal acts and I'm sure those will be developed as the negotiations go forward.

PHILLIPS: Well you talked about the reason why Taylor Law was put into place, it was to prevent things, for example, an economic hit to the city: something that New York is definitely -- has suffered and is still suffering the economic hit.

And also the loss of that firefighter, who had to bike it to work, actually he's in grave condition I'm told. So exactly what you were saying, Taylor Law was put into effect -- the reason why it was put into effect. We saw exactly what it was supposed to try and prevent.

PATAKI: Well, Kyra, that's exactly right. It's not just the economic loss, as significant as that is. It's the threat to the health and safety of New Yorkers. And you mentioned the firefighter. And I know him. His family is very close to me. His name is Matt Long.

I talked to his father about a half-hour ago from the hospital. We're all praying for Matt's recovery. He's going through a very difficult fight. And this is just an example of why you cannot have essential public employees break the law and go out on strike.

PHILLIPS: I hope you don't mind if I ask you this. It might be a personal question, so maybe I should phrase it a little differently with regard to the Union Chief Roger Toussaint. I wanted to ask you if you like him, but maybe I should ask you if you think he's a good leader. Do you think this is right man for the job?

PATAKI: I don't think anyone can break the law and put themselves above the law. Regardless of whether they're someone who makes the law or someone who is a union leader or someone in any capacity. There's a reason the laws exist and the essence of our entire country is the rule of law and respect for the rule of law.

So certainly I have enormous respect for the men and women who run or subways and buses and work so hard to make transit -- mass transit so good as it is in New York. It's better than it's been, I think ever.

But on the other hand, I have to share my grave doubts about those who put themselves above the law, jeopardize the public safety and break the law. There's a reason the laws exist, there are consequences for those who put themselves above the law. No one can do that. And the sanctions and fines under the Taylor Law are real, they're automatic, they cannot be waived, and they're not going to be waived.

PHILLIPS: And Governor, Union Chief Roger Toussaint said, "Look, Rosa Parks had to break the law. Because she broke the law and now we're driving the buses and not sitting at back of the bus." Brought up a few racial overtones.

PATAKI: You know, Kyra, Kyra, if I might, this -- this strike posed the greatest hardship, not for the stock brokers or the lawyers who can somehow manage to get around, but for working New Yorkers.

People who work as waiters in the restaurants, people who work as the secretaries, people who work in the shops and the factories. They have been enormously hurt by this strike. And the vast majority of those don't make the salaries that the TWU make.

They don't have the health care benefits, they don't have the pension benefits. They can't retire at 55 and pay nothing the rest -- for their pension. They don't get lifetime health care with no cost at all to the employees.

So this is not something where it's about anything other than the MTA having put forth a very fair offer. The TWU leadership ordering an illegal strike, now they have agreed to come back. I'm grateful, I'm happy for that, for the people of New York that they have come back and ended the strike. But there's a reason the law exists. It has real penalties that cannot and will not be waived. No one is above the law.

PHILLIPS: Governor, we'll follow the condition of Matt Long, that firefighter, that has been gravely injured because he had to bike it to work. We sure thank you for your time, Governor George Pataki.

PATAKI: Thank you, Kyra.

PHILLIPS: We're going to take a quick break. More LIVE FROM right after this.

(COMMERCIAL BREAK)

PHILLIPS: Well, the closing bell is about to ring on Wall Street.

(STOCK MARKET REPORT)

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