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Massive Manhunt for Missing U.S. Soldiers in Iraq; Chrysler Under New Ownership; Wildfires Rage in Florida; Taliban Chief Killed
Aired May 14, 2007 - 06:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Sold. Chrysler under new ownership this morning. Can the deal help Chrysler and the stalled audio industry turn around?
Plus, where are they? A massive new effort to find three U.S. soldiers in Iraq. Claims from a group linked to al Qaeda creating new fears on this AMERICAN MORNING.
And good morning to you. It is Monday, May the 14th.
I'm John Roberts, here in Washington, D.C.
KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry.
We're going to have much more on that story of the missing soldiers in Iraq.
Also, some other stories on our radar today.
It's going to be a critical day for firefighters in Florida and Georgia as they struggle to make some progress. Wind and lightning triggering new wildfire flare-ups already, and there are two major interstates that are closed. Big stretches of them closed. Hundreds of people evacuated, as we heard from Rob.
John, the fact of the matter is, is they need rain. They have more than 200 fires burning in almost every county in the state of Florida because of the severe drought.
ROBERTS: And we'll be going there to talk with John Zarrella about those fires in just a couple of minutes.
Also, a scare for students in Tennessee. They were on a field trip to a state park, teachers staged a fake gun attack. Told the kids that it wasn't a drill. A lot of them were really, really frightened.
We're going to be talking with one of the students and his outraged mother just ahead.
First, though, Iraq is at the center of two big stories that we're following this morning.
South of Baghdad, a massive manhunt is under way for three American soldiers feared captured by an insurgent group this weekend. And in Washington today, word that President Bush has given the go-ahead for rare talks with Iran designed to help curb the violence in Iraq.
CNN's Hugh Riminton is in Baghdad following the search efforts. And Suzanne Malveaux is at the White House.
Let's start with Hugh in Baghdad.
Hugh, we understand there's been some firefights in and around the town of Yusufiyah as the U.S. military out looking for these three soldiers, engaged some insurgents.
What do we know about the search, who potentially is holding these three?
HUGH RIMINTON, CNN CORRESPONDENT: Well, the Islamic State of Iraq is the name of the organization that has claimed to be holding them. This is a group that al Qaeda set. Essentially, an intent to give some political cover to what is a terrorist organization, and also draw in other Sunni insurgent groups.
So, in broad terms, you could say al Qaeda or al Qaeda-linked groups are claiming to have them. No verification from the Americans as they search for this, but it certainly is plausible, and in the past they have tended to be in their public announcements, through their Web sites, pretty accurate in what they say.
So, the question is now not so much who has these three men, but where they are holding them. And that is what's occupying the minds of the military at the moment.
ROBERTS: You know, Hugh, very similar to an incident last year in the same area of Mahmoudiya-Yusufiyah, where a couple of U.S. soldiers were taken hostage. It was about three or four days later that they were found dead, their bodies booby-trapped.
I assume that there are fears that the same thing could happen, but could it also be because the Islamic State in Iraq is being so vocal about this that they're using them as a bargaining chip?
RIMINTON: Well, I think what they'll be most likely wanting to do with these three men is keep them alive for a little while until they can maximize their advantage out of it. And what is their advantage?
Their advantage is to do whatever it can to show the United States as being impotent, to portray these people perhaps on television through their -- through their Internet outlets. You know, to perhaps make demands, demands that don't expect to get met, but that nevertheless add political pressure to the Bush administration, perhaps to the Iraqi administration. That's what we might be expecting to see in the next few days, unless there is some resolution of this before then, and that's plainly what the U.S. military is trying to bring to a head.
ROBERTS: All right.
Let's shift now to the issue of Iran's involvement in Iraq.
And Suzanne Malveaux, Ambassador Ryan Crocker, who is the new U.S. ambassador to Iraq, is going to be meeting with his Iranian counterpart in the coming weeks. This would seem to be a huge shift in U.S. policy.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You know, John, this is very significant, and the reason why here is, four years into the Iraq War, the United States, the Bush administration very much needs Iran's help here. It is no mistake and no surprise that we've heard from U.S. allies, Middle Eastern allies, Egypt, Jordan, Saudi Arabia, all Sunni-dominated, very concerned about Iran's influence, which is, of course, Shia-dominated.
Also, the United States is talking about this political reconciliation that they need, that nothing is going to happen without that. Well, they need Iran's help in making that happen, because obviously Iran has quite a bit of influence when it comes to the Shiites that are in Iraq. And they want to make sure that they disband those militia and at least have some sort of leverage in working with the Shia and the Sunni together -- John.
ROBERTS: Some administration officials are making sure that Iran doesn't misread this as the U.S. going soft on it.
Let's take a quick listen to what Vice President Dick Cheney said about Iran last week.
(BEGIN VIDEO CLIP)
RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: And we'll stand with our friends and oppose an extremism and strategic threats. We'll disrupt attacks on our own forces. And we'll stand with others to prevent Iran from gaining nuclear weapons and dominating this region.
(END VIDEO CLIP)
ROBERTS: So, certainly, Suzanne, the vice president saying, look, this is not about nuclear weapons.
Are they really trying to separate these two issues of Iran's involvement in Iraq and the problem of the nuclear proliferation?
MALVEAUX: John, that certainly is the message from the administration. But I want to make a point here, which it really is all about Iran's influence and the concern over its dominance in the region. And it's become a much more powerful player.
So, yes, on the one hand they're saying, we're not going to be talking about the nuclear program specifically, we're going to be talking about Iraq. But it really is one in the same here, where you think about ultimately what they want to do here is try to control the influence, Iran's influence, and try to make it a positive player in the region.
ROBERTS: Still, an amazing change, though, in the White House's position.
Suzanne Malveaux, in front of 1600 Pennsylvania for us. Hugh Riminton in Baghdad.
Thanks very much.
CHETRY: And we have early reaction this morning to news that Chrysler is being sold to a private equity firm specializing in turning around troubled companies.
AMERICAN MORNING'S Ali Velshi is live at Chrysler's U.S. headquarters in Auburn Hills, Michigan.
ALI VELSHI, CNN CORRESPONDENT: Good morning, Kiran.
Here's the story. About nine years ago, Chrysler and Daimler merged to become DaimlerChrysler. It was supposed to be a merger of equals, and I think that was done within a few months. This was really -- it became a German company. A lot of people lamented that.
But here's the problem. A public company gets pressure from its shareholders. And recently, shareholders of DaimlerChrysler, particularly the German shareholders, have been saying that the U.S. part of the operation known as Chrysler Corporation hasn't been doing as well, and they should just shed it.
So, two months ago, DaimlerChrysler said, all right, fine, Chrysler is on the table, and today we have a buyer. It is a U.S. private equity firm, Cerberus. It is the owner of National Rent a Car and Alamo Rent a Car.
Treasury secretary John Snow, former Treasury secretary John Snow, is the chairman of the company. They're buying this company.
So, how does that change things? Well, a private equity firm doesn't have to answer to shareholders. It only answers to its own investors. And it largely chooses who those investors are.
So, the sense is that this company can move forward without having to deal with the quarterly reports to shareholders. They can take a slightly longer-term view.
I spoke with Jason Vines. He's the senior vice president for communications. He was here just before going into the building. Here's what he had to say about it.
(BEGIN VIDEO CLIP)
JASON VINES, SPOKESMAN, CHRYSLER GROUP: This is a very bright day. And you're going to see a lot of counterclaims from people in the know. But for people inside this company, this is kind of a re- birthday.
(END VIDEO CLIP)
VELSHI: Interestingly for the company, the unions, which had been very concerned about what this means -- a private equity firm could come in and cut more jobs. Chrysler has already seen 13,000 job cuts this year. The unions are getting on side with this deal, which may indicate that it's the best deal they think they could have had.
I'll have more on this through the course of the morning, Kiran, but as of now, Chrysler Corporation is coming home to the United States.
CHETRY: You know, and the impact on the jobs is going to be a tough one, especially for states like Detroit, that rely on the manufacturing -- I mean like Detroit, Michigan, cities like that that rely on manufacturing jobs.
CHETRY: Is there any indication of how many more jobs will be shed?
VELSHI: No indication just as of yet. We know they'll be cost- cutting. So, you can imagine there will be jobs cut.
This place -- I mean, I've spent so much time here in the last few years, and it's always been the story, Kiran, someone else shedding jobs. We've seen home prices in the Detroit area plummet more than any other market in the United States.
This is, you know -- there is some sense that this might be the end of it, at least for Chrysler. That this might be the worst being over.
A private equity firm wouldn't invest in Chrysler if it didn't think it could make money out of it. So, the feeling initially is that this might be a positive and we may have bottomed out.
CHETRY: All right.
Ali Velshi, live for us in Auburn Hills, Michigan, this morning.
ROBERTS: Eight minutes now after the hour. We turn now to the wildfires burning across the country.
In California, firefighters say the Catalina Island fire is mostly under control. Crews say that cooler weather conditions are n their favor. The humidity is up, the winds and the temperature both down.
In northeastern Minnesota, near the Canadian border, a place you don't normally associate with wildfires, there's one there growing another 10 square miles today. Dozens of houses and cabins have been burned, and hundreds of people forced out of their homes.
To the south, in Georgia, in Florida parts of I-75 and I-10 remain closed because smoke is limiting visibility. More than 200 fires are burning in 57 out of 67 Florida counties. So, only 10 counties without fires. Forecasters say winds could kick up today and really exacerbate the whole situation.
CNN's John Zarrella is live in Lake City, Florida, near the junction of I-10 and I-75, where all the problems are happening.
John, how is it looking there morning?
JOHN ZARRELLA, CNN CORRESPONDENT: Well, John, right now you can see that the sky has cleared a little bit. We don't have the smoke and the haze that we had the other day. But here, look at this. This is the headline in the "Wildfire Extra" today -- "Critical Situation".
And that's exactly what we have here today, because the concern for firefighters is that, as the winds pick up -- and they have been -- and as the humidity starts to drop, it's going to make it very, very difficult on them, and the fires could very well spread. They're hoping that the fire lines hold, and today they say is the day that's pivotal -- John.
ROBERTS: Are they fighting this mostly on the ground, John, or is there an air assault involved in it, as well, very much the way that we see in California and out West in the Rockies?
ZARRELLA: Well, they'd like to be able to use a little bit of an air assault, but here in the East, primarily it's fought on the ground with bulldozers. That's how you battle these fires, building these enormous firebreaks. But they have been hampered by the fact they can't get aerial assets up because of the thick smoke and haze the past couple of days.
They've not been able to use any helicopters to drop water, haven't been able to get recon up to tell them where the tough, hard hot spots are in the fire. So that has really hampered their efforts.
ROBERTS: Hey, John, how far away from the actual fire zone are you where you're standing now?
ZARRELLA: Yes, we're actually about six to 10 miles from the fire line. And every day the Division of Forestry brings us in to exactly where the fires are, which is 441. Here, if you go straight out 441, all of this is shut down to the Georgia line. And just about six miles from here is where they're fighting these fires.
ROBERTS: All right, John. We'll keep checking back with you throughout the morning. Thanks very much.
John was mentioning the amount of smoke that they saw on the ground. Take a look at these pictures from one of our I-Reporters showing just how fast the smoke was moving.
I-Reporter Steve Woo took this picture on Friday morning. This was in St. Petersburg. Here's the same view just a few hours later.
Take a look at how much that changed -- Kiran.
CHETRY: Yes, it's unbelievable to see it. I mean, it looks like a fog rolled in.
CHETRY: And it's -- it's the smoke that came in. And for it to come over the water, you can just imagine how difficult it has been in a lot of these counties in Florida. Some 200 some fires burning all across the state.
ROBERTS: Yes. And as we said, 57 out of 67 counties, there's a fire in them. Amazing.
CHETRY: And Rob Marciano said in one word, it's drought.
Meantime, you know that if one of these were your child you would just be outraged, and a lot of parents are this morning about a school field trip in Tennessee where school staffers, including the assistant principal, staged a gun attack. They didn't tell the sixth graders on the trip that it was a drill.
(BEGIN VIDEO CLIP)
SHAY NAYLOR, STUDENT ON CLASS TRIP: Turned all the lights and said that they had just got a call saying that there was a random shooting going on around the park.
(END VIDEO CLIP)
CHETRY: And then apparently a teacher disguised in a hooded sweatshirt knocked on a window and pulled on a locked door. The kids were huddled under tables, sobbing, terrified, before they were told, it's not real.
Well, the assistant principal said it was intended as a learning experience. The principal is saying that it involved poor judgment.
Later on in the hour we're going to speak to one of the students on that trip and a parent.
ROBERTS: Poor judgment, as you said earlier, understatement of the year.
ROBERTS: He was known as the killer of killers, but this morning, the death of a vicious Taliban leader is being called a huge victory in Afghanistan.
Where do we stand on the hunt for the world's top terrorists? A status report coming up next.
And who is to blame for sky-high gas prices? Everyone wants to know. We're asking your questions this morning when the CEO of Gulf Oil joins us in the studio.
You're watching AMERICAN MORNING. The most news in the morning is on CNN.
CHETRY: Quarter past the hour now. We head down to Rob Marciano at the CNN weather center.
ROBERTS: It's being called a major victory for U.S.-led coalition forces in Afghanistan. Mullah Dadullah, one of the Taliban's top commanders called the killer of killers, was himself killed during a military operation in southern Afghanistan this weekend.
A closer look at all this now with CNN terrorism analyst Peter Bergen, who's just back from five weeks in Afghanistan and Pakistan.
Welcome back, Peter, first of all.
PETER BERGEN, CNN TERRORISM ANALYST: Thank you, John.
ROBERTS: So, how significant is this that Dadullah is no more?
BERGEN: I think it's quite significant. Obviously, the Taliban's going to continue, but, you know, this was their military commander, a very brutal guy. He kept beheading journalists, kidnapping people.
ROBERTS: He personally beheaded someone that you know.
BERGEN: Yes. An Afghan journalist I know, he -- who was killed in April. Dadullah had kidnapped the Afghan journalist and an Italian journalist, let go of the Italian journalist after some money was paid. Some prisoners were exchanged, and then beheaded this guy.
So, you know, a very brutal guy, but, you know, the question is, how will the Taliban react?
ROBERTS: Well, yes. I mean, how significant an impact will it have on their relations?
BERGEN: I think that, you know, it's going to be tough for them to find a military commander of this guy's stature, to use -- if that's the appropriate word. Mullah Omar, the leader, is not a military commander. They've lost a couple of other key commanders in the past year or so. So I don't think there's going to be anybody who will immediately step into his place.
ROBERTS: What about the spring offensive? I remember during the months of November, December and January, everyone was saying, we'll wait until the spring because the Taliban is really going to launch a major offensive. It doesn't seem to have happened.
BERGEN: Yes, it doesn't seem to have materialized, and maybe three reasons for that. First of all, a lot of people in Afghanistan now are harvesting poppy, particularly in the Taliban area. So they're fully engaged in that. It's the height of the poppy-growing season, height of the opium season.
Another reason is that these guys have switched -- they've learned to go up against U.S. military or NATO in a large military formation is basically suicidal. So, they're adopting IED tactics, suicide tactics. We've seen suicide attacks go up by five times last year, IED attacks doubled. So that's kind of -- you know, that may be their offensive, instead of being in sort of a large military operation, conventional, it will be more of these...
ROBERTS: So, if it's more of a harassing operation, what kind of threat do they really represent to the stability of Afghanistan?
BERGEN: Well, I think they don't represent a strategic threat. They represent a tactical -- major tactical problem.
ROBERTS: Hey, something else we want you to get -- get you to touch on. Possible threats from Kurdish militants associated with al Qaeda against U.S. military installations in Germany? What is that all about?
BERGEN: Well, you know, John, the 9/11 plot was conceived of in Hamburg. So, there are Islamic extremists in Germany, as there are in many European countries. And it's quite hard to attack the United States now directly, so second best, attack a U.S. military base in a European country.
ROBERTS: Is that something that they could actually pull off?
BERGEN: They sunk the Cole in Yemen in 2000, which was -- you know, almost sunk the Cole. One of the most (INAUDIBLE) in the U.S. Navy. So, you know, al Qaeda and like-minded jihadist groups, you know, do have these skills.
ROBERTS: We also want to give you a plug. You've got a special coming up on the Discovery Times Channel called "Assignment IEDs".
Tell us a little bit more about that.
BERGEN: Well, you know, IEDs, as you know, are the leading cause of U.S. military deaths, both in Iraq and Afghanistan. So, we look at the history of IEDs, which actually started, interestingly, on Wall Street in 1920 with anarchist who attacked J.P. Morgan's house, killing 20 people with the first modern IED.
And then we look at, you know, what's happening today, the kind of countermeasures that we have against these things, how the U.S. military is dealing with them. Hopefully, an informative documentary.
ROBERTS: Interesting piece.
Peter, as always, good to see you. Glad that you're back safe and sound.
BERGEN: Thank you, John.
ROBERTS: All right.
Peter's special, "Mission Ops: Assignment IEDs," airs Tuesday night, by the way, on the Discovery Times Channel -- Kiran.
CHETRY: All right. Thanks so much, John.
Well, before you drop a letter in the mail, there's something you need to remember today, and that's the price is going up. We're going to have more on that.
Also, the Department of Defense pulls the plug on YouTube, on MySpace, and some other popular Web sites. We're going to find out why, coming up on AMERICAN MORNING.
ROBERTS: Well, if you're into snail mail, get ready to shell out a little bit more money. The cost of a stamp is going to go up to 41 cents today. The old rate was 39 cents, which means that if want to send a letter, you're going to have to buy that 2 cent stamp and stick it on. But for the first time, the postal service is offering the forever stamp.
It's locked in at 41 cents, good forever, even if the price of stamps goes up again. Of course, if the price of stamps does go up, the next edition of the forever stamp will cost a little bit more.
But Kiran, it's a pretty good deal. Load up on these things, and mail letters for 41 cents from here to eternity.
CHETRY: I don't know. Can you -- first of all, I'm going to lose them. Second of all, can you trust it? Can you really say, I mean, 40 years down the road I pull out this crusty little stamp and say, well, it was 41 cents two decades ago.
ROBERTS: Well, let me ask you this question: Do you trust the U.S. government?
CHETRY: How much time do we have? We don't have enough. We'll talk about it later.
Meantime, a major deal to sell Chrysler was announced early this morning. A private buyout company is going to be calling the shots now.
We go to AMERICAN MORNING'S Ali Velshi, live at Chrysler's American headquarters in Auburn Hills, Michigan.
Now, is this a good day or a not so good day when you're talking about car companies?
VELSHI: I've got to say, Kiran, I've had to be in Detroit on many days which haven't been good days for the auto industry. They've been about layoffs. This is seen as a good day for now, and I'll tell you why.
First of all, DaimlerChrysler, the German company, has shed Chrysler, which it's been trying to do for some time. This has been a bit of a drag on the company's earnings.
Number two, Chrysler comes back to the United States. It becomes a U.S.-owned company, albeit by a private equity firm. Which means it doesn't have to answer to shareholders, and that might be where the benefit comes in.
With shareholders -- these are the same shareholders who pressured DaimlerChrysler to unload the U.S. company -- the fact is, with shareholders you've got to answer to them on an ongoing basis. The restructuring of the car business in America is a bit more of a long-term episode.
Now, Tom LaSorda, who is the president and CEO of Chrysler Corporation, is going to stay on as the head of the new company, which is going to be called Chrysler Holding. Here's what he said about the deal. He says, "Chrysler will be better positioned to focus on its long-term plan for recovery rather than just short term results."
Now, the company buying Chrysler is Cerberus. It is a private equity firm, a very big one. It owns National Rent a Car, Alamo Rent a Car, among other major holdings.
The chairman of that company is former Treasury secretary John Snow. Here's what he had to say about it. "Cerberus believes in the inherent strength of U.S. manufacturing and of the U.S. auto industry. Most importantly, we believe in Chrysler."
There's some suggestion there, Kiran, that, in fact, there won't be more job cuts, although somehow this company has got to cut costs. And they have said that there will be cost-cutting.
We've also heard from the United Auto Workers, who are behind this deal. They say that they have looked at it, they think it's the best deal for their workers. So they're on side. So, I would say, generally speaking, this looks like a good deal.
I'll talk to you later about what this means for American car buyers. But for now, that's it from Auburn Hills -- Kiran.
CHETRY: Ali Velshi, thanks a lot.
The top stories of the morning coming up next.
Why are gas prices sky high for yet another summer? We're going to be talking to the CEO of Gulf Oil. He's going to join us live for a one-on-one interview right here in the studio in just a couple of minutes.
And also, if you were a parent, what would you do? A group of elementary school students telling the kids a gunman's on the loose, scaring the children. Parents are outraged. And then the school says it was just a hoax, the teachers were kidding. They were trying to teach a lesson.
Well, we're going to get a first-hand account from a student just ahead.
Also, uncovering America. Exposing Asian-American stereotypes. The man who won the "Survivor" contest, Cook Island's year -- that was divided up by race -- is our ambassador in revealing this special series.
That's ahead on AMERICAN MORNING.
ROBERTS: Morning in the nation's capital. There's a shot of the Washington monument. Supposed to be an absolutely beautiful day here in Washington, not only today, but again tomorrow. High temperatures getting up as much as 86 degrees in the next couple days, after a long, drawn out sort of end to winter, summer definitely almost upon us here. Welcome back, it's Monday, May 14th. I'm John Roberts.
CHETRY: And I'm Kiran Chetry here in New York. Good to see you John. Some stories on our radar this morning. We're talking about the price of gas on the rise, $3.06 a gallon. How high will it go? You talked about heading into the summer months and of course demand is much higher as people travel in the summer. So do big oil companies charge too much? Are they raking in record profits? We're going to actually talk about it with the man in charge of Gulf Oil. He's here to talk to me one-on-one in a just a couple of minutes.
ROBERTS: Some explaining to do I would say.
A scare for students in one Tennessee elementary school. They were off on a field trip to a state park. There was some talk of ghosts stories and other things that were going on. Well, apparently some teachers thought that it would be interesting to stage a fake gun attack, not tell the kids that it was a drill until afterwards and, apparently what happened was the students were absolutely terrified after what's happened at Virginia Tech and so many other schools. They had no idea what was going on. Some of them actually thought that they were going to die. We're going to talk with one of those students and his mom a little bit later on in this hour.
CHETRY: That's just really unbelievable, especially the reaction from the principal which was that maybe they used some poor judgment. So, we'll talk more about that.
ROBERTS: I think, you know, in her defense, I think the principal is very upset by all of this.
CHETRY: All right, well, also, kicking off a week of special coverage here on CNN uncovering America, a look at Asian American stereotypes. You remember Yul Kwon. He won "Survivor Cook Island" the last time around. The contest actually broke up contestants into racial groups for a portion of that series. He's going to show us what he found when he went to Hollywood.
ROBERTS: If you've got anything, by the way, that you want to know about the news or the world around you for that matter, e-mail us. Send your questions to firstname.lastname@example.org. It's our ask AM segment. We'll pick some of the questions, give you the answers as we go along here on this AMERICAN MORNING.
A massive manhunt is under way in Iraq right now for three missing American soldiers feared captured by an insurgent group. The soldiers were ambushed on Saturday near the town of Mahmoudiya in an area often called the triangle angle of death, 4,000 troops have been deployed to look for the missing soldiers. The insurgent group called the Islamic state in Iraq, posted claims online yesterday saying it had captured the three. Four other American soldiers and an Iraqi interpreter were all killed in that attack.
Opening statements begin today in the Jose Padilla terror trial. It's in Miami. Padilla, a U.S. citizen has been in Federal custody since May of 2002. He was arrested in Chicago, originally suspected of plotting with al Qaeda to detonate a radioactive dirty bomb in the United States. Those charges have now been watered down to just being charged with aiding terrorism.
Secretary of State Condoleezza Rice is in Russia right now talking missile defense. Rice will meet with Russian President Vladimir Putin in an attempt to overcome tensions between Moscow and Washington. Defense Secretary Robert Gates was on a similar mission just three weeks ago.
CHETRY: Well, gas prices are on the rise again. We're actually talking about it right now, the current national average $3.06 a gallon. It's up from $2.81 a gallon just a month ago and last year at this time $2.90 a gallon. So where does it end? Now even gas station owners say they're being forced out of business. In fact, we talked to a gas station owner in Brooklyn on Friday. He actually decided he was going to give up selling gas.
(BEGIN VIDEO CLIP)
DAVID GOLDSMITH, FORMER BROOKLYN GAS STATION OWNER: Huge super profits with gasoline sales. Those profits are not being made by little guys like me or even the medium-size retailers. The oil companies were making the money.
(END VIDEO CLIP)
CHETRY: David Goldsmith told us he couldn't break even selling gas any more so he bought gas - he had bought gas from a Gulf distributor. Joe Petrowski is president and CEO of Gulf Oil. He joins us now. Thanks for being with us. Is David's assessment accurate that your companies and other big oil companies are making money and pushing the smaller guys out?
JOE PETROWSKI, PRES & CEO, GULF OIL: I wish we were making the amount of money. We're not an integrated refiner. We're a down stream distributor. But he is absolutely right that the retailer, who is obviously bearing the brunt of the public's anger, is the one making the least amount of money and the run up of gasoline in fact is making less money today than they did a year ago. Really to understand gas prices, you have to break it up into its components. And crude oil is certainly up dramatically and I don't think anybody is to blame for that. That's worldwide demand. That's primarily driven by good growth worldwide and (INAUDIBLE). It is refining profits that are at absolute record levels. Normally a refining margin to turn the crude into refined products is between 15 and 20 cents a gallon.
CHETRY: You guys don't get money off of refining?
PETROWSKI: We don't refine. We just distribute and store oil. We run terminals and downstream distribution. But the integrated majors, there's been a lot of consolidation in the oil business in the last few years and there are probably five or six major refiners worldwide who control the brunt of refining and those margins are at absolute all-time record levels to a degree that's 80 cents a gallon to put it in perspective which --
CHETRY: A number of reasons, but let's just get to the bottom line. A lot of people are fired up about the price of gas. They read about the billion dollar profits from oil companies. They just say it just doesn't feel right. We're being pinched that pump. Can't companies do something to lower the price, especially when we're a country at war right now? Is that realistic?
PETROWSKI: I think it's not realistic to lower the price of crude. I think there are things, there are public policy initiatives that could be done that would lower the price of oil. One of the problems in oil prices is that we've created boutique fuels. We have literally specs of gasoline that cannot be used in one section of the country that can be used in another and that creates these little pockets of what I would call constrained supply.
CHETRY: Which is why we see prices upwards of $4 a gallon in places like California.
CHETRY: I have a question. There has not been a refinery built in this country since 1973. Who is to blame for that? They say another reason for the spike in gas prices is that there are refineries off line, those that are closed for repairs and so, we're not being able to refine at a rate where we can lower the prices.
PETROWSKI: Refinery utilization has been particularly awful this spring. And that's been a huge contributor factor, probably 30 to 40 cents in the price of gasoline. There hasn't been a refinery built in the United States since the early '70s. I don't think anyone is to blame for that. There has been a lot of refinery expansion at existing refineries and I don't think we're going to build a refinery in the United States.
PETROWSKI: Crude oil production peaked in the United States in 1973 and it's much more economic to build the refinery where the crude oil is produced and we really haven't produced an increased amount of crude oil in the United States since the mid '70s, early '80s. I really don't think there will be a huge amount of refineries built. There is one scheduled in Arizona.
CHETRY: Where does it end for consumers? What are they looking toward as we head into the summer months when demand for fuel is much higher and we typically see prices rise?
PETROWSKI: I honestly think that prices will be cheaper on Labor Day than they are today and probably cheaper in a month or so. I think we really were hurt by some of the terrible spring turn around season in the refining business. Refinery margins of 80 cents a gallon are not sustainable.
CHETRY: Is there any onus on big oil to help out people like David or the consumer or are they just in it to make money and that's just how the cookie crumbles?
PETROWSKI: We at Gulf Oil are very concerned about the distributor since we are mainly focused downstream. We're going to try to do everything we can to help our distributors stay in business. But the realities today in the gasoline market is that you cannot make money just selling gasoline. So a lot of gas stations are threatened with going out of business and we've lost 200,000 gas stations in the last 20 years in this country and it is accelerating with these high prices and this volatility.
CHETRY: David Petrowski, CEO of Gulf Oil, thanks for answering some of our questions today.
PETROWSKI: Thank you.
ROBERTS: And remember a couple years ago when President Bush offered to let the oil companies build new refineries on closed military bases? Haven't heard much about that lately.
Coming up now to 40 minutes after the hour, soldiers are losing access to popular Web sites like myspace and youtube. Internet correspondent Jacki Schechner joins us now with more. What's going on?
JACKI SCHECHNER, CNN CORRESPONDENT: Well, it would seem that way. There's a new memo that's been posted online at the Web site of United States forces in Korea and it seems to come from the commander (INAUDIBLE) Bell, who is in charge of the forces.
ROBERTS: In Korea.
SCHECHNER: In Korea. That's him right there. According to this memo, on or about today the joint task force in coordination with the Department of Defense is going to start shutting down access on military computers to 13 content sites, sites like youtube and stupidvideos, mtv.com and myspace. What they say is it takes up too much bandwidth on military computers and that it's also bandwidth and information that can be used otherwise. What they're saying is that on access on a separate network, which are personal computers, computers that soldiers can use in their barracks and elsewhere, those are still accessible through those computers.
ROBERTS: Recently, they issued an order that said that soldiers and Marines could no longer blog. Is this part of that or is it different just simply because of the technology?
SCHECHNER: That's actually sort of a misnomer. Not that they couldn't blog. What they had for some time is their blogging policies online. You can take a look at this and if you take a look at the date on these policies, this was actually issued April of 2005. It says that soldiers need to register that they have a blog with their commanders and they need to make sure they don't put any operational security information on their blog. We hear the story pop up again from time to time, we did hear it recently, but it wasn't really any more strict than what we'd seen before.
ROBERTS: No unauthorized blog.
SCHECHNER: They just want to make sure people are being careful. What happens sometimes is people put information online that they don't even realize is a possible operational security risk. They don't realize a photograph might lead to something. What they're doing is just reinforcing the rules that your commander needs to be able to have access to your blog to make sure that you're not putting anything on there.
ROBERTS: And let's keep checking this morning to find why now, too, with this --
SCHECHNER: That was our big question and we're actually trying to get in touch with some of the people in Korea to why they're issuing this statement again now.
ROBERTS: Appreciate it, thanks.
SCHECHNER: Of course.
CHETRY: Coming up, students on a class trip, they were scared to death by a frightening drill, as teachers were calling it, staged by their teachers. We're going to talk to one of the kids who was on that trip when that person was told there was a gunman on the loose and told the kids to hide, run for cover.
Also uncovering America, exposing stereotypes of Asian Americans on TV and in the movies brought us to the guy who won "Survivor," the year it was broken down by race. You're watching AMERICAN MORNING. The most news in the morning is on CNN.
ROBERTS: Forty four minutes now after the hour, parents of students at Scales elementary school in Tennessee are outraged this morning after hearing what teachers and an assistant principal did on a class trip. They told the kids that a gunman was on the loose. The children were hiding under desks and crying. It wasn't until much later that the kids learned it was only a drill. Eleven-year-old Dalton Brown was one of the students on the trip. He and his mother Brandy Cole join us now from Tennessee. Dalton, give us the "Cliff Notes" version here. What happened to you that night?
DALTON BROWN, STUDENT ON CLASS TRIP: We were sitting in the dorms and all of a sudden, assistant principal Mr. Barch (ph) walks in and tells the other teacher that we have a problem and about five minutes later, they come up and tell us to get downstairs. So, we're downstairs and they tell us to get under the table as we have a code red.
ROBERTS: A code red, what were they saying was the code red?
BROWN: A code red is when there is a person in the area with a gun, knife or bomb.
ROBERTS: So, what went through your mind, you and all you and your fellow students?
BROWN: Well, I was really scared because I come on this trip and I'm really excited and then I hear that there are people with guns in the area.
ROBERTS: You heard about Virginia Tech and the other school shootings that have taken place. Did that go through your mind, as well?
ROBERTS: Brandy Cole, what to you make of all this? I have read some accounts of this where they say, look, the teachers were telling ghost stories and it's sort of a tradition that they do this sort of thing with kids. Was it they just took the idea too far? What happened?
BRANDY COLE, DALTON'S MOTHER: Absolutely. I'm holding their news release in my hand and the very first thing they said is a typical campfire prank and it's just appalling that they would even classify this as such a thing because there's nothing typical about what they did to our children. The kids were underneath tables crying and praying to God and begging for their lives, thinking they were going to die and that they were never going to see their families again.
ROBERTS: You know a ghost story is one thing. I mean, everybody told ghost stories around the campfire, but this sort of thing, this hits a little too close to home.
COLE: Absolutely. Especially considering what happened at Virginia Tech. All the kids knew about that. These kids had been away from home for four days at this point. They trusted these people. We trusted these people. They're calling this an educational drill and saying that it was a planned thing. If this was a planned thing, they should have told us about it. We had parent meetings about this trip. They could have told the parents that they were planning on having some sort of code red drill for these kids. They could have got the parents' permission. We were told nothing about any such thing taking place while the kids were up there.
ROBERTS: We mentioned Virginia Tech, the principal of Scales elementary, Catherine Stephens is a graduate of Virginia Tech. Here's what she had to say about the whole incident. She does sound like she's pretty upset about it. Take a listen.
(BEGIN VIDEO CLIP)
CATHERINE STEPHENS, PRINCIPAL: The circumstance that occurred involved poor judgment. My hope is that we can learn from this and in the end, it will have a positive result of growth for all of us.
(END VIDEO CLIP)
ROBERTS: SO Brandy, poor judgment and Dalton, poor judgment, do you buy that?
COLE: Well, you know, at first I did, but, again, I'm holding their news release statement in my hand that is full of half truths and just incorrect statements. So, you know, I find it hard to believe that all of that is sincere.
ROBERTS: Well, I would hazard to guess that something is going to happen as a result of this. Brandy Cole and Dalton Brown, thanks very much for joining us. We appreciate you sharing your story this morning.
COLE: Thank you.
CHETRY: Up next our special report uncovering America. It's a revealing new look at Asian American life, how Asian Americans are portrayed many times in Hollywood. We're going to be talking with the champ of "Survivor," Yul Kwon. He's up next on AMERICAN MORNING.
CHETRY: All this week, CNN is uncovering America. It's a new look at Asian American faces, people and stories. Yul Kwon won last season's "Survivor" in a competition that initially started off divided by race. He says that growing up, there were no strong Asian American role models on TV or in the movies and he's determined to change that. We sent Yul to Hollywood to see how the entertainment industry is getting beyond the stereotypes.
(BEGIN VIDEO CLIP)
YUL KWON: I just couldn't relate to them. Usually they're the cooks or they were kung fu guys or the gangsters.
UNIDENTIFIED MALE: For generations of Asian American males, it's been rare to see realistic characters on the screen who look like us.
DANIEL DAE KIM, ACTOR: One of the first images I saw was Bruce Lee and as much as I idolize him today, when I was in second and third grade he was the cause of a lot of bullying for me.
JEFF ADACHI, PRODUCER/DIRECTOR, "SLANTED SCREEN": The roles have always been scarce and one dimensional and I think part of it is because men are viewed as a threat.
UNIDENTIFIED MALE: Jeff Adachi is producer and director of "Slanted Screen," a documentary about the negative portrayals of Asian American actors. How realistically do you think Asian American men are portrayed in today's contemporary world?
ADACHI: We're seeing some progress with Asian female actors like Lucy Liu, Sandra Oh (ph), but for Asian men, interestingly enough, there still seems to be a lack of real roles.
CHRIS LEE, MOVIE PRODUCER: The issue is you got to have the writers and directors because it's all well and good to say, Hollywood, why don't you do more portrayals of us. Well, I don't know if Hollywood knows exactly how to do portrayals of us.
UNIDENTIFIED MALE: Writer and director Justin Lin is trying to change that. His break-through movie "Better Luck Tomorrow" shows complex characters who happen to be Asian American. How hard has it been to try to convince the studios to let you cast Asian American actors?
JUSTIN LIN, WRITER/DIRECTOR: It's not a question of talent. It's a question of opportunity. What I've learned is at the end of the day, it's business and when people, when corporations spending billions of dollars to make movies, they're not out there to take risks.
UNIDENTIFIED MALE: (INAUDIBLE) Actor Roger Fan has co-starred in several of Lin's films, but says opportunities like that are limited.
ROGER FAN, ACTOR: I'm an all-American guy and it's weird. When I go into Hollywood, the way the system is currently set up, I get pigeon holed into certain types of characters that are about as far from me as possible.
UNIDENTIFIED MALE: But there have been signs of change, most recently on television with (INAUDIBLE) popular character on NBC's "Heroes" and the Yugen Kim (ph) and Daniel Dae Kim, as a (INAUDIBLE) couple on ABC's "Lost."
KIM: You are seeing a depth to these characters that might not have seen on any television show.
UNIDENTIFIED MALE: Do you think we're getting to a point where eventually we will have that break-out star?
KIM: It's going to take time for that actor or that group of actors to kind of emerge. It's not going to happen overnight, but, with every positive representation or every real character that's on television, it's a major step forward.
CHETRY: Yul Kwon joins us now, great job on that piece, by the way. Did you have a fun time out in Hollywood doing it?
YUL KWON: I did. It was a blast.
CHETRY: What did you learn about the changes that we're slowly seeing as you referred to in "Lost," the two characters there and some of the other popular shows when it comes to Asian American characters?
KWON: I think it's terrific that we're starting to see more complex and fully developed characters on television. At the same time I think it's clear that we still have a long way to go. If you look at the Asian male characters on "Lost" and "Heroes," as popular ad they are, they're still depicted as foreigners. They're Asians as opposed to Asian Americans.
CHETRY: Right as in, would an Asian American actor be able to play a Brad Pitt leading male type of role without having to bring attention to the fact that he's indeed, Asian.
KWON: Exactly. I think most of the characters you see on screen are still defined by their ethnicity. I mean I think these characters are fantastic because you're starting to see a longevity and a story arc (ph) and an evolution to the personalities, but, notably, they still don't speak English.
CHETRY: It's interesting because there's another high-profile firing when we talk about the Don Imus controversy and the comments that he made. Another radio show, the Dog House" with JB and Elvis also with CBS radio, they're no longer going to be broadcast after the outcries because of a crank, a prank phone call that was ripe with offensive Asian stereotypes. What do you think of that?
KWON: I think it's, obviously, unfortunate that this incident happened. But I'm actually very gratified to see that they were fired. I think as an Asian American, part of our community feels that because of the model minority myth, somehow it's OK to make fun of Asian Americans, that the type of response you get if you make fun of an Asian American in a public forum isn't the same kind of response you get if you make fun of an African American or some other ethnic minority. So I think it's high time that we get the same kind of response from the community as with other incidents like this.
CHETRY: Once again it really has to do with whether or not the representatives of the community speak out about it. This was an Asian American association that heard this in a replay. This had already gone on pre-Imus and it just slipped under the radar and there was an outcry over that as well as some of the comments that Rosie O'Donnell made in a joking way about Chinese.
KWON: I think a lot of Asian Americans felt very offended by Rosie O'Donnell's (INAUDIBLE) comments and they were upset that there wasn't more of an outcry that there wasn't any kind of, anything more than a slap on the wrist. So I think this is, for a lot of people a validation of the fact that we're still minorities in this country and it's not OK to make fun of us.
CHETRY: What do you have for us tomorrow? KWON: Tomorrow we're going to be exploring the glass ceiling for Asian Americans. So the fact is that a lot of Asian Americans are entering the work force in high numbers, but if you look at the highest tiers of corporate management, we're still severely underrepresented. So we're looking at why is that the case?
CHETRY: And those numbers are struggling so we'll check out more of that. Also, Yul's interviews by the way can be seen on our Web site, cnn.com/americanmorning. Yul, thanks so much for joining us today.
KWON: Thanks so much, Kiran.
ROBERTS: It's a really interesting series. And I loved the photographs that Yul took that we highlighted last week as well.
And can one of America's biggest auto makers be saved? Coming up, Chrysler sold this morning. What is next for the company and its workers and what does it mean for consumers?
It gives entirely new meaning to the phrase going green. The latest trend that may prove that even the dead can be environmentally friendly. You're watching AMERICAN MORNING. The most news in the morning is on CNN.
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