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American Morning

Businesses In New Orleans; Transportation Secretary To Visit Mississippi; L.A. Power Outage; Tropical Storm Ophelia Update; Minding Your Business

Aired September 13, 2005 - 07:30   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody. It's 7:30 here now in New York.
Let's get right back to Miles. He's in New Orleans this morning at a levee which really has been the focus of much effort over the last couple of weeks.

Miles, good morning again.

MILES O'BRIEN, CNN ANCHOR: Good morning, Soledad.

Yes, this is the famous 17th Street Canal. And this is that big breach that caused so much water to just spill out over neighborhood after neighborhood all across greater New Orleans. and this morning, there are hundreds of thousands of homes that are still inundated by water. We've been telling you about all the progress being made toward the French Quarter and the center part of town, but that's on the dry side of this break.

On the wet side of this break, it's difficult to see much sign of progress. Yes, the water has come down somewhat but, nevertheless, there's still a long way to go and there's many questions left as to how many of these houses might be uninhabitable forever. Now there is questions about homeowners inside there and there's also a question that many business owners are asking this morning, can they pick up the piece in the wake of all of this. In many cases their businesses are damaged. In almost every case, it's very difficult to find employees.

Joining me now to talk a little bit about this is David Koch. He is the founder and owner of a security company here, Certified Security. Been in business for 20 years. A long time matter of fact, lifetime resident of New Orleans.

David, your business is intact, you're able to keep your security call center going all throughout this with generators. But right now you've got the case of the missing employees. Tell us about that. DAVID KOCH, NEW ORLEANS BUSINESS OWNER: Well, we have a total of 26 employees. Currently, we have six employees back working for us. The majority of them, we can't get in touch with. And the few that we have, there's some of them that told us that they've lost their homes, they've lost their apartments, everything that they have and they've just given up and they've moved, two people individual, have moved to Dallas and said that they're not coming back. So I suspect, at least in my central station operators, we'll lose 80 percent of them.

MILES O'BRIEN: Eighty percent. And perhaps there are other businesses facing similar kinds of situations. Now it's difficult for a small business owner to come back from that. You've been just sort of keeping it going you and your brothers are partners manning the phones, getting a few employees to help you out here and there. Can you stay in business realistically in the city of New Orleans in the near term future?

KOCH: Most definitely. It's going to be tough initially to get new employees and to have them trained. But the business is going to come back I think back stronger than ever. And . . .

MILES O'BRIEN: Well, why would you say that, though? You've lost a lot of potential customers here. I know you have customers all throughout the state, but this has got to be a real hit.

KOCH: Well, sure it does, but people are going to rebuild. People aren't giving up on New Orleans and Jefferson Parish. People love it here. They've lived here their whole lives and they're not moving. Certainly we will lose some people who are going to go out of state, but the majority of the people are going to stay and rebuild. This is not the first hurricane we've gone through. It won't be the last. So we're accustomed to doing that.

MILES O'BRIEN: We sure hope it's the worst, anyway.

Let's talk about you. You're on the flooded side of this breached flood wall here. The good news for you is that you're in a 16th floor of a high-rise, so you've got a fairly good chance that some of your stuff has been preserved. You've got a flooded lobby for now, so you don't know what's inside. Obviously, you know a lot of people who are not in as good a shape right now. What are they saying to you? Are they going to stay, stick it out, or are people leaving as well? KOCH: Well, I can't speak for everyone, but my brother, for instance, is also in Jefferson Parish. He had five feet of water in his house. He has no intentions of leaving. He will go ahead and has a contractor lined up as soon as the water's out to go ahead and rip out the sheetrock and rebuild that. And the majority of people are going to do the same.

MILES O'BRIEN: What would it take, though, for people living beneath these flood walls to feel confident about living there again? Do you need a category five system in order to feel confident living here?

KOCH: I think that would certainly help. And I think that's something that all of us are going to push for is to raise our levees. But we realize living in Southeast Louisiana that that will always be a risk and there will never be a levee high enough that's totally going to protect us. So that's something we have to accept if we're going to live here.

MILES O'BRIEN: Accepting this scene before us is not easy. I know this is really the first time you've come and taken a look at it up close. You've seen the pictures, of course. Seeing the pictures on TV, the satellite imagery. When you see it in person, what goes through your mind?

KOCH: A little bit of sadness for all the people that live in those homes, that have those businesses there and what they're going to have to go through to move forward. It's a real tough time for all of us. A tough time for our children. And it's just going to be real hard.

MILES O'BRIEN: Could you have ever conceive of what we've seen here?

KOCH: No. We've talked about it for 20 or 30 years and, you know, the worst case scenario and the city flooding but none of us had any sort of real feeling of what that could actually be like or that it would ever happen here. We knew it was a reality, but we just couldn't bring ourselves to believe that this kind of damage could happen to our community.

MILES O'BRIEN: David Koch, thanks for coming by.

KOCH: Thank you.

MILES O'BRIEN: And good luck in the future.

Soledad.

SOLEDAD O'BRIEN: Miles, thanks. Later this morning, Transportation Secretary Norm Mineta will travel to Mississippi to survey the damage to the state's infrastructure. Allan Chernoff is live in Gulfport.

Allan, good morning to you. Do you know exactly what the secretary is going to be taken to see this morning?

ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Soledad, the secretary is going to be seeing some very severe damage. Hurricane Katrina took some of the roads around here and basically lifted them up as if they were rugs and shook them all around. So what you end up seeing is buckled roads. Lots of damage that you might be expecting from an earthquake.

Also, the bridge is severely damaged here. There are three bridges to the Biloxi peninsula that are out. Some of them could take years to rebuild. But some of them, the mayor told us just need a little bit of help. So there is some hope over there but they're going to need some federal dollars and the transportation secretary later today will be talking about an initial amount to Mississippi to help out in rebuilding the infrastructure over here.

President Bush visited yesterday. He was at a church about 10 blocks away from where I'm standing. He was helping to give out food, shook hands with people. He also said that the Americans should not be focusing so much on criticizing the federal government's initial response, but more on rebuilding.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: So it's appropriate that we step back and take a look. Here in Mississippi, and in Louisiana, people want to move forward. They understand there's time to try to blame somebody. But they want to get their lives back together and that's the spirit I see.

(END VIDEO CLIP)

CHERNOFF: That is what people are saying here. They really do want to get their feet back on the ground and move forward. Now the governor helping to move forwards that effort, has arranged for temporary housing. Already, the state has arranged for 1,250 trailers and mobile homes and they're planning to get as many as 10,000 trailers and mobile homes for so many people who are displaced, tens of thousands of people.

Soledad.

SOLEDAD O'BRIEN: Allan Chernoff for us this morning.

Allan, thanks.

The power's back on this morning in the L.A. area after a massive blackout that left some 700,000 people in the dark on Monday and it also sparked fears of terrorism. CNN's Jen Rogers has our report this morning.

(BEGIN VIDEOTAPE)

JEN ROGERS, CNN CORRESPONDENT, (voice over): A major power outage hit Los Angeles, trapping workers in elevators and slowing cars to a crawl.

CHIEF WILLIAM BRATTON, LAPD: My immediate reaction was that this was not a terrorist act.

ROGERS: A reassuring comment for the people of Los Angeles, the day after the anniversary of 9/11, and a reported al Qaeda threat targeting the city. A threat that federal officials treated with skepticism. It took nearly two hours before the official word came down. The cause of the blackout, simple human error.

RON DEATON, LOS ANGELES DWP: There were workers working on a receiving station. Those workers accidentally cut a line.

ROGERS: One cut line ended up cutting power to nearly three- quarter of a million people. The main problem became traffic. Even for a city intimately familiar with clogged streets, intersection after intersection without stop lights took the concept of just crawling along to a whole new level.

Los Angeles International Airport reported a flickering of lights but no flight interruptions. The city was essentially back to normal by evening. The question for some, especially in the wake of Hurricane Katrina, could the nation's second largest city deal with a larger outage or natural disaster?

BRATTON: The Los Angeles region, and indeed the state of California, are probably among the best prepared entities within the United States. And that's because of the years of experience that they've had because of the natural disasters that so frequently befall the state.

ROGERS: The mayor has called for a full investigation into the blackout. Now, with the lights back on, many realize how much worse it could have been, considering the plight of those in the gulf states still recovering from Katrina.

Jen Rogers for CNN, Los Angeles.

(END VIDEOTAPE)

SOLEDAD O'BRIEN: And police say there were very few reports of injuries during that blackout.

For our other stories make making news this morning, let's get right to them with Carol Costello.

Hey, Carol, good morning.

CAROL COSTELLO, CNN CORRESPONDENT: Good morning, Soledad.

Good morning to all of you.

"Now in the News."

President Bush is vowing to keep his focus on Katrina recovery efforts even as he hosts the Iraqi Leader Jalal Talabani. Today's meeting comes one day after the president got his first close-up look at the devastation in New Orleans. He toured parts of the city on foot with Louisiana Governor Kathleen Blanco.

President Bush is facing scathing criticism, though, for what some say is a slow federal response to Katrina. A new CNN/"USA Today"/Gallup poll shows Americans are divided on the racial issue. Nearly 60 percent of black Americans polled say aid was slow in reaching New Orleans because many of the victims were black. But nearly 90 percent of whites reject the race issue. For his part, President Bush said Monday that "Katrina did not discriminate and neither will the recovery effort."

A bizarre story unfolding in rural northern Ohio. Police there rescued eight children locked up by their foster parents in three foot wooden cages. The parents claimed they caged the children, ages one through 14, to protect them. The eight children are all in state care now and so far no charges have been filed.

In sports, just for a moment last night it looked like Barry Bonds hit a home run at his first at-bat in more than a year. The Giants slugger drove a long one to center field. There it goes! But, maybe you can see, a fan reached over the fence and grabbed the ball, so it was ruled a double instead. The seven-time MVP has been sidelined since last year for three knee surgeries.

And Tropical Storm Ophelia still lurking off the Carolina coast. The often changing storm is slowly creeping closer to land with winds near 70 miles an hour. But let's get more from Chad. Good morning.

CHAD MYERS, METEOROLOGIST: Good morning, Carol.

A hurricane hunter aircraft plane is in the storm now looking for winds possibly back to hurricane strength. It did strengthen some overnight. Some of the convection deeper. Some of the storm stronger. The eye itself or the center a little bit smaller. We talk about that momentum thing when the eye gets smaller, the storm gets faster. The winds get faster.

Seeing those showers down the Carolina beach, right on down to Little River and even into Myrtle Beach seeing some rain showers. This is the first outer band squall that we've seen so far this morning coming right onshore here. Here's North Carolina and right on down into South Carolina.

And that's going to be the case for a lot of today. One arm after another. One band, then another band, and then a break and then another band. This storm is forecast to make a right-hand turn, get very close to Wilmington and North Carolina, up through Morehead.

Now we usually show you these spaghetti maps, we call them. Fourteen different computer models. Usually they go every different direction. Well, not today. A couple into South Carolina, around Myrtle Beach, but the rest right through the same area. Right through Coastal North Carolina today.

Back to you, Soledad.

SOLEDAD O'BRIEN: All right, Chad, thanks.

Still to come this morning, Mike Brown resigned as FEMA chief on Monday. But will the move silence critics of the White House? A closer look at that is up next on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: President Bush will be in New York today for a summit mark marking the 60th anniversary of the United Nations. On Monday he toured the streets of New Orleans for a look at the devastation and the progress being made after Hurricane Katrina. In Washington, meanwhile, his beleaguered FEMA director, Michael Brown, resigned. Dana Bash was traveling with the president and joins us this morning.

Nice to see you, Dana.

DANA BASH, CNN CORRESPONDENT: Nice to see you.

SOLEDAD O'BRIEN: Nice to see you in person for a change, as opposed to at the White House.

BASH: Absolutely.

SOLEDAD O'BRIEN: You were with the president. I'm curious about a couple of things. Did you ask him about his reaction to the resignation of Michael Brown? And what did he say?

BASH: We did. We tried. What happened was, this is news that the White House expected to get out yesterday, but it seems as though they didn't want it to get out until after the president took off, until he was in the air. So we were screaming questions to him. And I think we have a sound bite of his initial response.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I haven't no, I have not talked to Michael Brown or Mike Chertoff. That's who I'd talk to. As you know, I've been working. And when I get on Air Force One, I will call back to Washington. But I've been on the move.

QUESTION: Our understanding is that he has resigned. Would that be appropriate?

BUSH: I haven't talked to Mike Chertoff yet. And that's what I intend to do when I get on the plane. You know, you probably maybe you know something I don't know.

(END VIDEO CLIP)

SOLEDAD O'BRIEN: So that mean, you know something he doesn't know or his aids were not briefing him?

BASH: No. No, we didn't know anything he didn't know. The president knew. But basically what they did not want was for the president to talk about Michael Brown and that to be the sound bite of the day, if you will. They wanted really the story to be what the president was trying to do on the ground yesterday. And it seems as though they were a little bit surprised that Michael Brown got this information out before they were ready to do it.

But I will tell you, just bigger picture here, when it comes to Michael Brown, Soledad, it is really quite stunning to see the fact that the president let somebody go. It's so uncharacteristic. I was trying to think of any time in the whole four years plus that he's been in office that he's let somebody go under fire. He's let people go because they were off message from his perspective perhaps. But it really hasn't happened. Even a top aide just a few days ago said, when he's under pressure like this, it sometimes seems it backfire. It didn't happen this time and it's very telling us to how crucial it was for them to sort of wipe the slate clean when it comes to Michael Brown.

SOLEDAD O'BRIEN: And how important this whole issue of how this crisis has been managed and handled every step of the way is to the White House certainly.

Let's talk a little bit about because I am just so insanely curious. What was it like with the president and Governor Blanco and Mayor Ray Nagin, all of whom have said relatively nasty things about each other over the last couple of weeks, and then some alliances and then kind of everybody made up and they were on the same team again. What was that like?

BASH: You know, you see the picture there. They were together for most of the morning yesterday in Louisiana. And we know that it has become, as you mentioned, really quite poised at times, the relationship, the differences as the president says, the blame game as to who was responsible. The communication breakdown that was really quite striking that we definitely now know about.

The body language with the president, and particularly the governor, especially when they were on that truck, they were touring through the streets of New Orleans. The first time the president did that, the president and the governor were right next to each other, but they barely even spoke to each other, barely even looked at each other. There was one moment later when the president left where he gave the governor a hug and they sort of, you know, seemed to make up for the cameras.

SOLEDAD O'BRIEN: Her comments about unity may be overstated a little bit?

BASH: Yes. But exactly. But the bottom line is, you can tell that this they're at a point right now where whatever the difference is, they all need each other right now because the public is blaming all of them.

SOLEDAD O'BRIEN: Yes. Maybe enough blame to go around for everybody.

Quickly, I want to ask you about leadership. This is really important to the president. And we certainly saw that in 9/11 where maybe there were some stumbles out of the gate but he was able to relatively quickly sort of get the feeling that he was in charge and he was leading the nation at a tough time. Have we seen that now?

BASH: You know, Soledad, tomorrow is the fourth anniversary of that moment when the president stood on the rubble with his bullhorn and said, I can hear you, which a lot of people really thought turned the corner for him in terms of his perception of his leadership and cemented him as a strong leader. A lot of people who you talk to in Washington close to the White House are saying, where is that bullhorn moment, where is the moment that the president rallies the country.

SOLEDAD O'BRIEN: Supporters of the president say this?

BASH: Supporters of the president frustrated that it has not happened yet. The White House first of all, that was sort of an impromptu moment and has not happened in all of the trips that the president has made down there so far. But the White House insists that at some point in the near future the president will perhaps give a big speech, perhaps try to rally the country but it's interesting that he has not done that yet.

SOLEDAD O'BRIEN: Three trips in.

BASH: Three trips in. And, you know, it seems as though they're just they're waiting for some positive news to be talking about before that happens.

SOLEDAD O'BRIEN: You know, back to your point, a lot of blame to go around on this one. Dana Bash, nice to see you again in person. BASH: You too. You too, Soledad.

SOLEDAD O'BRIEN: We never get that chance.

BASH: Thanks.

SOLEDAD O'BRIEN: Still to come this morning, get back to Andy Serwer. He's "Minding Your Business." On the brink of a financial crisis, Delta Airlines turns to its pilots for a lifeline. We've got details on that coming up next on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: Welcome back, everybody.

Business news now. We're looking at the airline industry. And we can almost call this bad news and worst news.

ANDY SERWER, CNN CORRESPONDENT: I think it's right, Soledad. I mean I'm calling it a bankruptcy watch. There's really no other way to put it for Delta Airlines here. It's going day- by-day. Yesterday, the stock fell 22 percent to under $1 for the first time. Look at that ski slope. Not good news there.

Meanwhile, the airline asked its pilots for new wage and benefit concessions. I don't think they're going to be too happy to hear that because last year they gave back $1 billion in concessions. So this story continues to bear watching.

Meanwhile, a new report about the overall airline industry shows more red ink, Soledad, and these numbers are truly staggering $7.4 billion the airline industry is expected to lose this year. Now, a couple of points. First of all, you can see how the numbers are very high after 9/11 and the recession. Then they go down as the business recovers a bit. Then as the price of fuel has skyrocketed, we go back up to $7.4 billion. That's based on $57 a barrel oil. And right now we're well above that. And another point about that is that that's global airlines. The U.S. actually loses more than the $7.4 billion. They lose $8 billion. But because airlines in Europe and Asia make money, it lowers the number. So the U.S. industry is actually worse than the global business, which is just really remarkable at this point.

SOLEDAD O'BRIEN: So the picture is even worse than the numbers show.

SERWER: I'm sorry to say that's true, Soledad.

SOLEDAD O'BRIEN: Well, and so I was right, it was bad news and more bad news.

SERWER: Yes.

SOLEDAD O'BRIEN: All right, Andy, thanks, I guess.

SERWER: You're welcome. Yes, I guess.

SOLEDAD O'BRIEN: Let's get right back to Miles. He's in New Orleans this morning.

Miles.

MILES O'BRIEN: Thank you very much, Soledad.

And 17th Street Canal is where we stand. We're on the repair. This is about 2,000 sandbags covered by gravel. And as you look there, that is the flooded section of New Orleans. There are dry parts of New Orleans to be sure, but there are hundreds of thousands of homes beyond what you can see there and it's unclear if and when anyone will be able to return. Back with more on the levees and the future of these flooded neighborhoods in just a moment.

(COMMERCIAL BREAK)

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