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American Morning

North Korea Missile Threat; New Jersey Rolls the Dice; Who Is Kim Jong Il?

Aired July 05, 2006 - 06:29   ET

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

MILES O'BRIEN, CNN ANCHOR: Happening this morning, North Korea test-firing yet another missile in the last few hours. That makes seven missile tests since yesterday, including a long-range rocket that failed 40 seconds after launch.
The U.N. Security Council will meet this morning to discuss those tests. Governments around the world condemning North Korea's actions.

The White House sending a top diplomat to huddle with U.S. allies in Asia. Undersecretary of State Christopher Hill is the top U.S. negotiator in those six-party nuclear talks that include North Korea.

Good morning. I'm Miles O'Brien.

CAROL COSTELLO, CNN ANCHOR: And I'm Carol Costello, in this week for Soledad.

Breaking news out of Asia to tell you about this morning. North Korea has fired another missile, just as the world is scrambling to react to its earlier missile test. An emergency meeting at the U.N. Security Council has been called for 10:00 Eastern this morning.

All of the North Korean missiles landed in the Sea of Japan. All but one are medium-range missiles. The one causing the most concern is a long-range missile called the Taeopodong-2. But it failed less than a minute into flight. It's not known if North Korea has built a nuclear weapon, but American intelligence does not believe North Korea has a warhead small enough to fit onto the missile.

Of course the White House is condemning these tests. And in addition to the Security Council meeting, it is sending its chief negotiator in the nuclear disarmament talks to Asia today.

CNN's Suzanne Malveaux live at the White House to tell us more.

Good morning.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Carol.

You can bet President Bush and the rest of the staff being informed, kept very well updated on what is taking place here, that seventh missile launch. And, of course, this is a great deal of concern here.

They say that this is a provocative act, but they also want to reassure Americans that there is no immediate threat to the United States. But we've heard from National Security Adviser Stephen Hadley, we've heard from White House Press Secretary Tony Snow, both strongly condemning this act. We expect later to hear from President Bush.

A statement released yesterday saying, "The United States strongly condemns these missile launches and North Korea's unwillingness to heed calls for restraint from the international community. We are consulting with international partners on next steps. This provocative act violates a standing moratorium on missile tests to which the north had previously committed."

Now, President Bush met yesterday with secretaries of defense, as well as state, to figure out the next steps here. As you have mentioned, they are sending the top envoy of the United States to negotiate, Christopher Hill, from the State Department, to the region. Also there have been outreach to the Japanese, the Chinese, the Russians. And what is very clear that this administration is trying to do is not to get pulled into some sort of confrontation with North Korea, but rather stick with the six-party talk format, to put the pressure on the Japanese, on the Chinese, to put pressure on North Korea, essentially, that this is something that they believe is the best tact here.

Of course, there's a lot of debate over that today -- Carol.

COSTELLO: Suzanne, many Americans are struggling to understand what exactly North Korea wants. You know, they want attention, but attention for what? What do they want from the United States?

MALVEAUX: Well, as you know, there are a couple of things they want. They want a security guarantee that the United States is not going to attack them, an end to the Korean War, if you will. This is something the United States says it's not putting on paper here, but they said many times they are not going after North Korea in some sort of attack.

The other thing, of course, is that this is a country that is doing very poorly economically. Its people are starving. They really are looking for economic international assistance.

They have been extremely isolated by the rest of the world, specifically the region. But that's why you have those other players, like China, who have very strong ties with that economy, that play such a key role here in trying to get them to change their behavior.

COSTELLO: Suzanne Malveaux live at the White House for us this morning.

Thanks.

O'BRIEN: So who or what in the world can stop North Korea from launching those missiles? The answers may lie in China. That country holds the most sway over the Kim Jong Il regime. But what will the Chinese do? What will they not do?

CNN's Andrew Stevens joining us now from Hong Kong with more on this.

What are they talking about in Beijing, Andrew?

ANDREW STEVENS, CNN CORRESPONDENT: It's an intriguing question, Miles, what will China do to this?

It's been more than 12 hours now and no official response from China. As you say, China has this very, very strong leverage over North Korea. It supplies a lot of the energy requirements, it supplies food requirements. In the past, it actually has turned the taps off just briefly on North Korea.

So, what do they do now? Well, it appears that this is a bit of slap in the face by North Korea to China given the fact that it was just last week that the number two man in China, Wen Jiabao, the premier, was saying very publicly that he did not want to see a missile test go ahead. Lo and behold, it's gone ahead.

A senior envoy is going to North Korea from China next week. No doubt, there will be a lot of pressure on North Korea to get back to those six-party talks.

But it's a very delicate balancing act for China. They don't want to see North Korea destabilized because they don't want a refugee problem on their -- on their own border. But they also don't want to see sort of the U.S. coming in and forcing issues there. So they're really very delicately balanced about exactly how they go forward.

O'BRIEN: So, Andrew, when people here ask, well, why wouldn't the Chinese just threaten sanctions, the simple answer is they're concerned that a lot of North Koreans will start crossing their border and who knows what that might lead to?

STEVENS: Exactly. Also, North Korea provides a pretty handy buffer, a cushion, if you like. I mean, it's a -- it's a key ally of China, so it keeps -- if there's a united Korea, for example, that would be probably very friendly to the U.S., which puts the U.S. potentially on China's right, on China's border.

So, you've got that military position, but you've also got this -- this fear that if there is major destabilization, that there's nothing to stop perhaps millions of people coming over the border. So, it is a very difficult position for them.

O'BRIEN: Andrew, is there a sense that this time -- and we say this frequently throughout the years -- but did this time -- did the North Koreans overplay their hand?

STEVENS: That is interesting, because if you look at what people are saying about, why has North Korea done this -- and the common answer seems to be, this is a call for attention, this is North Korea saying, hey, we are still important, talk to us, we want our own rights, we want aid, we want recognition, we want guarantees that the U.S. is not going to launch any military operations against us. But, by doing this, they could have done a complete miscalculation on this, because what it does, obviously, to those in Washington, the hawks in Washington, they say this is a deliberately provocative move.

They say, look, we've done five years of talks, and after five years, they are still prepared to do this sort of thing. So, what this is point of playing softball with this? Why don't we adopt a much harder line?

So, while North Korea is looking for an international ear, it may be getting an international back turn towards it instead -- Miles.

O'BRIEN: Interesting. A quick thought from you on this, and this might be in the realm of speculation, but I'll ask anyway.

We focus so much in advance on that long-range missile, the Taeopodong-2. And of all the tests we've seen, seven so far, it was the only one that was a dud. Is it possible these short to medium- range missiles are meant as a smoke screen to hide the fact they had a failed missile test?

STEVENS: Well, I guess they launched pretty much around about the same time. So, they -- it wasn't so much a test. A lot of people saying this was a show of force.

It's saying, look, we have got a long-range missile, which, embarrassingly for North Korea, didn't actually work. It failed rather spectacularly. But, we also have this array of short-term missiles. So, this is not so much us testing, this is us showing to the world we have got some armaments here, and we can, if needed, call on these short-term missiles.

Now, it's interesting, because there has been this massive failure of the Taeopodong-2. So, what do they do now? They're likely to continue to work on it. So perhaps we see more long-range missiles tests in the future -- Miles.

O'BRIEN: Andrew Stevens at our CNN headquarters in Hong Kong.

Thank you very much.

COSTELLO: Still to come, the man behind this missile crisis, the North Korean dictator Kim Jong Il, one of the most mysterious leaders in the world. A look at the man who dubbed himself the "Dear Leader."

O'BRIEN: And will it be deal or no deal in New Jersey? The casinos set to shut down over a state budget crisis. But wait, don't they bring in money?

We're live in Atlantic City. Stay with us.

(COMMERCIAL BREAK)

COSTELLO: It looks like there will be no deal in New Jersey, both figuratively and literally. The state's budget mess is now set to make Atlantic City's casinos the next victim. So how much does the state stand to lose if the casino doors close?

CNN's Mary Snow live inside the Borgata casino in Atlantic City to tell us.

Good morning.

MARY SNOW, CNN CORRESPONDENT: Hi there, Carol.

You know, what the state Casino Control Commission says is that, in revenue alone, on a daily basis, these casinos contribute about $1.2 million to the state. And the casino operators say that's just one tax (ph). That on an average day, these casinos here in Atlantic City -- there are 12 of them -- generate about $16 million a day in revenue. So lots of money being lost, about more than $1 million, though, at least for the state.

COSTELLO: So they generate that much money, why can't -- you would think that the state legislators would get it together and not -- not lose all of that tax money.

SNOW: Yes. You know, yesterday, when we were talking to gamblers when we got here, so many people were betting that this was just political posturing. They thought that there would be a deal worked out because so much was at stake. But both sides are standing firm.

There was a compromise plan offered yesterday, state lawmakers rejected it. So, you know, next up, we're going to be hearing from Governor Corzine at 9:00 this morning. And this has been going on for several days now.

The government shut down July 1st. This is just the latest phase. And there are about 45,000 state workers that have been furloughed. Other things, like campgrounds, state beaches, state parks, are also due to shut down today as well.

COSTELLO: Mary Snow reporting live for us from Atlantic City, New Jersey.

I'm sure you will keep us posted throughout the morning.

Time for a check of the forecast now. Chad is in Atlanta.

Good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Carol.

Who knew Howie Mandel would be so popular with this "Deal or No Deal" show. I mean...

COSTELLO: Where did that come from?

MYERS: Well, that's what you were saying, deal or no deal. And he knows every one of those girl's names, which is amazing to me, like 25 of them.

COSTELLO: Yes. I'm not going to comment on that. Forget it.

MYERS: It's my dad's favorite show. So there you go. (WEATHER REPORT)

COSTELLO: Thank you, Chad.

MYERS: You're welcome.

COSTELLO: Still to come on AMERICAN MORNING, a shocking glimpse of life inside North Korea. Undercover cameras reporting proof of concentration camps and other atrocities. The journalists risking their lives to show these images to the world.

But the man behind (INAUDIBLE) is North Korea's Kim Jong Il. Some say he's crazy. Others say crazy like a fox.

Stay with us on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Happening this morning, North Korea still test-firing another missile in the last few hours. That makes seven missiles since yesterday, including a long-range rocket that was a dud.

At the United Nations this morning, an emergency meeting of the Security Council to consider the response. So far, nearly universal condemnation of North Korea's provocative actions.

The White House sending Undersecretary of State Christopher Hill to meet with allies in Asia. Hill is the top U.S. negotiator in the six-party nuclear talks with North Korea.

COSTELLO: Of course, all morning long we're following the developments out of North Korea. Kim Jong Il has led that country for the past 12 years but remains one of the most mysterious leaders in the world.

Zain Verjee looks at the man considered by some to be a madman with nuclear weapons.

(BEGIN VIDEOTAPE)

PETER MAASS, NEW YORK TIMES MAGAZINE: He's not crazy. He might be emotional, he might be somewhat eccentric but crazy absolutely not.

ZAIN VERJEE, CNN CORRESPONDENT (voice over): Indeed ,Kim Jong Il's persona may be carefully cultivated, as supreme leader of an impoverished country, he has little to bargain with on the international stage. And his reputation may work to his advantage.

But behind it, there is by all accounts a shrewd dictator.

MAASS: Everybody that has met with Kim Jong Il, other than quite a few South Koreans, Americans, Russians, North Koreans have since defected. They all come out saying this man knows what he's doing.

VERJEE: Kim Jong Il inherited the role of absolute ruler from his father, Kim Il Sung, who died in 1994. The elder Kim dubbed himself great leader and the younger followed suit, he's known as dear leader. He is believed to have been born in the Soviet Union in 1941 or '42. But his birthplace is often listed instead as a mountain famous in Korean mythology. He's thought to have been married three times, although it's not clear if all were official. And he's known to have three sons and at least one daughter. Rather short in stature, he's rumored to wear platform shoes. He, nonetheless, had a reputation as a heard-partying playboy as a young man and reportedly still has an eye for the ladies.

JERROLD POST, FORMER CIA PROFILER: He recruits at junior high school level, attractive young girls with clear complexions and pretty faces to be enrolled in his joy brigades. And the joy brigades' function is to provide rest and relaxation for his hard work senior officials.

(END OF VIDEOTAPE)

COSTELLO: Zain Verjee reporting.

Kim Jong Il is also apparently a big fan of the big screen. Kim has built a state film company and once kidnapped a South Korean couple to help get it off the ground.

Zain Verjee's report first aired in "THE SITUATION ROOM." You can catch it weekdays at 4:00 and 7:00 Eastern.

O'BRIEN: Up next on the program, Andy "Minding Your Business."

Hello, Andy.

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Hello, Miles.

The U.S. auto industry is booming. Well, at least one part of it is. And we'll tell you which part that is.

Plus, those crazy hedge funds at it again. We'll tell you about one with an interest in the outcome of the World Cup -- Miles.

O'BRIEN: All right. There's a hedge fund for everyone, isn't there?

SERWER: That's about right.

O'BRIEN: Thank you.

Also ahead on the program, the advances in cloning technology. Did you know it's been 10 years since Dolly the sheep -- remember that, the cloned sheep? That was the first in the world. Dr. Sanjay Gupta takes a look how far the science has come and how soon we could see medical cures potentially based on cloning.

Stay with us.

(COMMERCIAL BREAK)

COSTELLO: I always want to go, "ooh, ah" whenever we... O'BRIEN: You know, fireworks on TV just do not do it for me.

COSTELLO: I know.

O'BRIEN: They just don't. Unless you're there and feel it, it just -- it doesn't work. Sorry.

I mean, maybe high definition, maybe with surround sound. But...

COSTELLO: So, Mr. Editor, Mr. Photographer, those of you who, like, worked to put those pictures on the air, forget about it.

O'BRIEN: Well, you did as good a job as you could. Thank you very much.

You know what this country needs? This country needs some more car salesmen, I think.

Don't you think?

SERWER: Apparently.

O'BRIEN: Andy Serwer, good morning to you.

SERWER: Apparently there are not enough of them.

O'BRIEN: Yes. Who knew?

SERWER: But people might think otherwise.

The auto industry obviously in dire straits in part, but part of it seems to be growing like crazy, and that's the auto dealership end of the business. Jobs are going begging at auto dealerships, according to a new survey by the National Auto Dealer Association.

Listen to this, 105,000 jobs need to be filled at 20,000 dealerships across the nation. Sales, management, administration, mostly in the South and the Midwest. And, in fact, the Greater Cleveland Auto Dealers Association actually has an internship program to try to get people into the biz.

Why is this? Well, overall car sales are actually pretty good.

You know, we talk about the big three having problems, but that masks, perhaps, booming sales by Toyota and Honda, et al. So, we need more auto sales people in the straight sales end, also in the computer technology end of it, the technicians. Financing loans, there's so much of that that's going on in the dealerships. And dealers are open seven days a week now, and they have long hours, so they need more people.

COSTELLO: Well, and there are so many negatives attached to a car salesman, the job of a car salesperson. I think that's maybe -- well, actually, journalists might be below car salesmen.

SERWER: I was going to say, TV anchors... (CROSSTALK)

O'BRIEN: We're duking it out.

COSTELLO: Yes.

O'BRIEN: Most polls I see, we're right down there with them. So be careful where you tread.

SERWER: Exactly.

O'BRIEN: Let's talk about the hedge funds, shall we? Yes, let's do that.

SERWER: Hedge funds. We're talking World Cup here. Yesterday, the semifinal between Italy and Germany was a real barn-burner. Italy won that. I see some cheers here amongst the crew. And today, Portugal is going to be playing France at 3:00 p.m. Eastern. And the Portuguese, obviously, are going to be watching en masse.

And interestingly, though, there are going to be some in that nation who will be watching even more closely. Particularly a gentleman, Nuno Goncalvez (ph), who runs a hedge fun there who has an interest in soccer players around the world. His hedge fund actually owns pieces of 15 players. The better they do, the more valuable they become. And as their value goes up, he then sells them, essentially, trades them to other teams.

He did own a big stake in the Portuguese star Christiano Ronaldo, who flipped the bird, as they say, at the crowd at one point, which caused some jitters. But he had already sold the rights to Christiano after...

(CROSSTALK)

SERWER: So it just works out perfectly here.

O'BRIEN: Yes.

SERWER: And it's interesting. You know, hedge funds are scouring the globe for all kinds of investments, and I guess this is -- this is the latest piece of that action.

O'BRIEN: I guess so.

COSTELLO: Fun.

O'BRIEN: What's coming up next?

SERWER: Coming up next, we're going to be talking about Jesse Jackson and his beef with BP, British Petroleum. So some little fireworks there, too.

O'BRIEN: All right.

COSTELLO: All right. O'BRIEN: Thank you, Andy.

COSTELLO: Let's talk weather right now, though, shall we, Chad?

MYERS: Good morning, Carol.

Good morning, guys.

(WEATHER REPORT)

MYERS: The next hour of AMERICAN MORNING starts right now.

O'BRIEN: Thank you very much, Chad.

Breaking news this morning.

North Korea launching yet another missile as international outrage grows. A statement coming out from the government of China as we speak. Our correspondents standing by with extensive live coverage of the threat.

All that ahead on AMERICAN MORNING.

Good morning to you. I'm Miles O'Brien.

COSTELLO: And I'm Carol Costello, in for Soledad.

O'BRIEN: The Chinese government out with a statement urging calm and restraint as it relates to the growing tensions with North Korea. We begin with that story and the barrage of missile firings from North Korea.

The U.S. has confirmed another test-firing just a short time ago. That makes seven just since yesterday. And now the question is, how will the world respond? Here in New York in a few hours, an emergency meeting of the U.N. Security Council to consider the options.

Now, all seven missiles landed in the Sea of Japan. All but one are medium-range missiles. And the one that caused the most concern in advance of these tests, a long-range missile called the Taeopodong- 2, failed less than a minute into flight. Some analysts say if it had worked, it might have been able to reach the western U.S.

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