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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Korea Crisis; Japan Deploys Patriot Missiles; Iran's New Nuke Facility; Gusty Winds Fan California Brush Fire; West Braces for Blizzard; Severe Weather; Kidnapped to Cuba; Louisville Outlasts Michigan; JCPenney Fires CEO Ron Johnson

Aired April 9, 2013 - 06:00   ET

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


JOHN BERMAN, CNN ANCHOR: A dire warning out of North Korea this morning. Foreigners in the south told to get out or take shelter in case of what it calls all-out war.

ZORAIDA SAMBOLIN, CNN ANCHOR: And "Star Wars" in the Persian Gulf? Take a look at the U.S. Navy's answer to Iran's nuclear program. Look, laser cannons that can torch a plane in an instant.

BERMAN: Wow. Spotted in Cuba, two young boys abducted from Florida allegedly by their own father. Now comes the hard part, how to get them home?

SAMBOLIN: And the heart-stopping, rim-slamming win for the ages, Louisville finding inspiration from an injured teammate capturing college basketball's national championship capping off a remarkable week for their history making coach as well.

BERMAN: And a remarkable comeback in the pool for me.

SAMBOLIN: Yes, it is. Congratulations, Mr. Berman. Even though I had not picked the winning team at all and I was what, five behind you?

BERMAN: You did well.

SAMBOLIN: I did incredibly well. Anyway, good morning. Welcome to EARLY START. Thanks for being with us. I'm Zoraida Sambolin.

BERMAN: And I'm John Berman. It is Tuesday, April 9th. It is 6 a.m. in the east. And up first we have new developments along the Korean Peninsula, North Korea issuing a warning that South Korea has to come up with a plan to evacuate foreigners should the two countries go to war.

North Korea's ironically named Asia Pacific Peace Committee says this morning if there is to be war, we do not wish to see foreigners in South Korea to be harmed. Jim Clancy, live in Seoul, South Korea this morning.

Jim, what do you make of these new warnings? Is this an escalation or is this just more rhetoric? And what's the response been so far?

JIM CLANCY, CNN CORRESPONDENT: Well, you know, it's branching out. Look, clear message and it was crafted to be chilling and ominous. And it was directed straight at, well, me. Telling me, as an expatriate working here in Seoul that I should consider getting out of dodge or looking for a place to run and hide.

But the reaction has not been what North Korea would have liked to have seen. Let me just give you a coat here from the U.S. embassy. It says, we inform our citizens that despite the current political tensions with North Korea, there's no specific information to suggest there are imminent threats.

All right that's from them. The Brits are saying, we're not commenting on the specifics of every piece of rhetoric coming out of North Korea. Our travel advice remains unchanged and that advice is it's safe to come here.

This is designed to punish South Korea, economically, if at all possible, cut tourism, perhaps get disrupt the economy by getting about more than 1 million expatriate workers that are living here in Seoul -- John.

BERMAN: Jim, this follows a development at the Kaesong Industrial Complex where North Korea pulled out its workers or North Koreans just didn't show up to work. That event also met with some skepticism, correct?

CLANCY: We don't know yet whether it's going to be permanent or not because once again, you can't judge what the North is saying. You can't really trust what they're saying and it would appear that they've shut it down at least temporarily. That's going to punish some of the firms that are in there.

But it's the president here, Park Geun-Hye had to say all this is going to do is convince a lot of firms, don't do business with North Korea because you can find yourself in a very expensive predicament because of their politics -- John.

BERMAN: All right, Jim Clancy in Seoul, South Korea, where the U.S. embassy, the British embassy warning you and other foreigners in Seoul there is no imminent threat. Thanks, Jim.

SAMBOLIN: And 3 minutes past the hour here. New this morning, Japan is taking some pretty dramatic steps in the wake of all this increasing talk of war. It has deployed patriot missiles in the central district of Ichigaya and in the suburbs of Asaka and Narashino forming a protective ring around Tokyo, if you look at the map there.

CNN's Diana Magnay has that part of the story from Tokyo.

(BEGIN VIDEOTAPE)

DIANA MAGNAY, CNN CORRESPONDENT: They were delivered in the dead of night, residents around the Ministry of Defense where I am waking up this morning to see two patriot missile battery systems where normally there is a baseball pitch. But it's not the first time that they've seen this. Every time since 2009 that North Korea has announced it will launch a satellite, the Japanese self-defense forces have deployed these patriot missile defense systems in the heart of Tokyo, and around Tokyo, whilst also moving aegis destroyers into the sea of Japan, which themselves have a sophisticated missile interception system on board.

I was talking to a security analyst who said those two systems combined, these patriots and the aegis destroyers, should have the capabilities of protecting the Japanese archipelagos from any kind of missiles that might come over or any kind of debris that might come off a missile that North Korea might test, and which might malfunction.

And that is a big concern. It's not so much that North Korea will target Japan although it has accused the Japanese of blindly showing U.S. policy and saying that it would strike U.S. military bases in Japan. There are, of course, 38,000 U.S. troops positioned here.

So Japan is essentially saying a low profile, but doing what it must, which is protect its citizens, whatever it is that the young leader of North Korea chooses to do. Diana Magnay, CNN, Tokyo.

(END VIDEOTAPE)

BERMAN: New this morning in Iran. The government says it has inaugurated a brand new uranium processing facility. It's located in the country's central province of Yaz. The announcement comes just hours after the U.S. Navy released new video of a laser attack weapon that's being deployed by the U.S. in the Persian Gulf.

The demonstration shows the laser bringing down a drone. Now this weapon is reportedly meant as a warning to Iran not to step up activity in the gulf if tensions over its nuclear program build up.

SAMBOLIN: And happening now, at least 200 people evacuated from their homes as strong, gusty winds fuelled a brushfire, and so far it's burned about 170 acres. This is just north of Los Angeles. It started in a building and then it quickly spread to nearby hillsides. About 400 firefighters are trying to get that massive blaze under control. Luckily, no one has been hurt.

BERMAN: We're well into spring, but it is a tale of two very different weather stories this morning. Here in New York where temperatures are expected to reach the mid 70s.

SAMBOLIN: How beautiful.

BERMAN: It's a gorgeous day here. We don't want to gloat because it is a very, very different story out west. Winter-like weather has millions bracing for heavy snowfall and gusty winds all the way from Colorado to Minnesota. Reports of tornadoes touching down in Northern Colorado --

SAMBOLIN: Look at that. BERMAN: You've got to look at this. Severe thunderstorms and hail just pelting parts of Kansas. Looks like another planet there. Jennifer Delgado is watching the storm in the weather center in Atlanta. Jim Spellman live in Golden, Colorado, where we're told they could see up to a foot of snow. So Jim, let's start with you.

JIM SPELLMAN, CNN CORRESPONDENT: John, we appreciate you not gloating. It was in the mid 60s here yesterday in the Denver area, in the 20s now. It's just starting to stick on the ground here. I think we can say we officially have a snowstorm on our hands.

They have about 400 plows ready to keep these roads clear for people who have to commute and as the snow starts to pile up, got word about 300 flight cancellations at Denver Airport. That's bound to go up as the day goes on.

Good news for school kids here, though. For the first time this school year, they'll have the day off in Denver and most of the suburban counties so good news for the kids, bad news for commuters -- John.

BERMAN: Our Jim Spellman. A snow day in April. You don't see that very often. Thanks, Jim.

SAMBOLIN: All right, so let's bring in meteorologist Jennifer Delgado to explain all of this. Good morning.

JENNIFER DELGADO, AMS METEOROLOGIST: Good morning, Zoraida. Good morning, John. To explain this, it's hard to explain. It's very cold for this time of the year. And what we're dealing with is a very strong storm system in the central part of the U.S. We're talking some of these locations a foot of snow for parts of South Dakota, Nebraska, even into Colorado.

I know where Jim is right now you're thinking, doesn't look like a lot of snow, but more of that is coming down. Here is the proof as we show you on the radar, there's that band of snow moving through from Colorado Springs, into Denver, as we move up towards the north we're looking at snow, there's that wintry mix.

You can see moving through Sioux Falls then a line of showers and thunderstorms moving through areas like Nebraska, north of Des Moines, moving into Wisconsin and also that area including Chicago looking at some lightning. That's starting to come to an end.

But as we get throughout the day, we are going to see more activity out there, with winds right now anywhere between 25 and 40. We are going to see reduced visibility whenever you're seeing some of that snow. So make sure you're taking it slow on the roadways.

The other thing that we're following today, and a big story, severe weather threat, anywhere in red. This is our greatest risk. Moderate threat for storms to develop, potentially, produce tornadoes and for this time of the year you typically see about 155 on average for the month of April. I want to point out to you a lot of big cities under the threat for severe weather. That includes Dallas, St. Louis, as well as Kansas City. Here's the setup for today. It's warm in the south and the east, high temperatures near 80 degrees. Back over to you guys.

BERMAN: Near 80.

DELGADO: Eighty.

SAMBOLIN: And you're not gloating.

DELGADO: No, he's not gloating.

SAMBOLIN: Thank you very much. It's 9 minutes past the hour here. The search for two kidnapped Florida boys taking a really dramatic turn here, the focus this morning is on Cuba. Law enforcement confirms 2-year-old Chase Hakken and 4-year-old Cole have arrived safely on the island nation.

They were allegedly abducted by their father, Joshua, who sailed the whole family to Cuba. Victor Blackwell is live in Tampa for us. What's the latest here, Victor?

VICTOR BLACKWELL, CNN CORRESPONDENT: Zoraida, this has elevated from a search here in Hillsborough County, Florida, to now an international incident. The State Department has confirmed to our Elise Labott that the U.S. officials in Havana are aware and involved.

They would not elaborate beyond that. The first we heard of their arrival in Cuba came from the Hillsborough County Sheriff's Office late yesterday when they say they received information that the Hakken family had arrived there. They also would not elaborate.

But we know that it was about five days ago, about this time, when authorities say that Joshua Hakken broke into the home of his mother- in-law, tied her up, and then took his children, her grandchildren, and escaped in a car.

Well they found the car, they searched for his truck, but later, there were reports that he had purchased a 25-foot boat, the "Salty" and set off into the waters. There are reports this morning that they have arrived in Cuba. The question now is, of course, will there be an extradition back to the U.S. -- Zoraida.

SAMBOLIN: Yes, I mean, that is the big question. There is no treaty. No extradition treaty between Cuba and the United States. The mom was also involved in this. She was picked up, also. Do we know if, in fact, she was involved in this or was she taken against her will? Do you know anything about that?

BLACKWELL: Well, that's the question that we have for Hillsborough County. We know that there is a long list and growing list of charges for her husband, Joshua Hakken, but so far, no list of charges for Sharon Hakken. We're hoping to get that information.

But there are several possibilities when it comes to extradition. Obvious to whether Cuba will extradite or not, but there is a third possible extradition policy or plan that may be the children will be allowed to be sent back.

But the parents will not. We'll see what happens. So these are all possibilities, but the legalities and the logistics of that still unknown.

SAMBOLIN: Interesting. I know you're following all these developments for us. Victor Blackwell live in Tampa. Thank you.

BERMAN: It's about 12 minutes after the hour right now. The Louisville Cardinals waking up as national champions. You know what? They probably never even went to sleep after that high-flying, heart- pounding 82-76 victory last night over Michigan.

You know, both teams really just brought their "a" games, flying dunks, hitting threes, slugging it out to the final buzzer. In the end it may have been the inspiration provided by the injured Kevin Ware that made the difference there.

Joe Carter is live from the Georgia Dome in Atlanta this morning. Joe, the finals are almost never this good.

JOE CARTER, CNN SPORTS CORRESPONDENT: You said it, John. I mean, this is one of the most thrilling first halves I've seen in a final game that I can remember. Everything you want in a championship game, this building last night, 75,000 strong, epically rocking.

You can coin that as a new phrase for the national championship game last night. Of course, we all followed the story of Kevin Ware, but for a moment a freshman named Spike stole the show. He scored 17 points, gave Michigan that big lead, but then the game's MVP Luke Hancock got superhot.

And in the second half Louisville did what they've done all season that's closed the games. Rick Pitino cuts down the net because the first college basketball coach to win a championship with two different schools. He spoke with our Rachel Nichols after the big win.

(BEGIN VIDEO CLIP)

RACHEL NICHOLS, CNN CORRESPONDENT: Was there a moment as the clock is ticking down that it hit you, we're going to win this game. We're going to be national champions?

RICK PITINO, HEAD COACH, LOUISVILLE: I was trying to find the clock. When it was 16 seconds, I knew it, and then for the first moment, because when we prepared for after North Carolina for Colorado State I knew it could end with them.

They were that good then I knew it could end with Oregon. Then I knew it could end with Duke. We were playing so many great teams, so many great coaches, but this is a special group of young men.

(END VIDEO CLIP) CARTER: Congratulations, obviously, to Louisville. The Michigan guys should not hang their heads. They played a great game and obviously with the number of freshmen and young players they have on that team they have certainly a very bright future ahead of them, guys.

SAMBOLIN: Yes, high expectations for Spike there. All right, Kevin Ware, who didn't play obviously because of his broken leg, it's a really happy ending for him, as well. A lot of people are crediting him with the win!

CARTER: You know, millions, and I say millions, watched him break his leg. It was a gruesome injury a week ago. We followed the story all week long and to see this kid be able to cut down the net last night when they lowered the basketball hoop for him to be able to cut down the net is an incredible ending to the story.

For him to wake up a national champion this morning. You just hear in his voice when he spoke with our Rachel Nichols after the game.

(BEGIN VIDEO CLIP)

KEVIN WARE, LOUISVILLE INJURED GUARD: It was all worth it. This is a great, great game and I really enjoyed every moment of it.

NICHOLS: And the reception you got from everyone around the country and the fans tonight?

WARE: It was big. The support has really been keeping me in my good spirits. Honestly that's what's getting me through right now. I just want to say thank you to everybody.

(END VIDEO CLIP)

CARTER: So the party continues for Louisville. Coach Pitino saying last night they're going to pack up the bus and head to New Orleans as the women, the women are playing in the championship game tonight against U-Conn.

Congratulations to Louisville, Rick Pitino what a day of him, the hall of fame, a national championship and congratulations to you, John Berman, for beating your colleague in the CNN bracket. I mean, by five?

BERMAN: It is a big development, Joe, and I do appreciate you pointing that out. Joe Carter, really thank you from Atlanta this morning. Take care, Joe.

SAMBOLIN: All right. Fifteen minutes past the hour. Looking for a taste of the great outdoors and she ended up eating dirt. Fighting off wild animals.

One teen's firsthand tale of getting lost in the wilderness, that's coming up.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back. Nineteen minutes past the hour.

Let's get you up-to-date. Major new developments this morning in the Korean crisis. North Korea warning the South to start making plans to evacuate foreigners should the two countries go to war.

Meantime, Japan is preparing for the worst as the communist rhetoric reaches fever pitch now. Batteries of Patriot missiles have been deployed at three sites around Tokyo, in case any missiles are launched.

BERMAN: Developing story in Serbia, at least 13 people, including a child, reportedly killed in a shooting spree outside Belgrade. The police chief saying a man in his 60s went into five different houses and started firing. Other media report right now that the gunman killed his own son and tried to kill himself and his wife. They're reported in serious condition right now. No word on motive.

SAMBOLIN: And we're hearing from the second of two hikers who survived after being lost in the southern California wilderness for days. Eighteen-year-old Kyndall Jack is telling her story at least the part that she remembers.

(BEGIN VIDEO CLIP)

KYNDALL JACK, RESCUED HIKER: I only remember the first night and the last thing I remember the first night was fighting off some animal with Nick. And then I just remember the last day scooting down a little hill -- actually, it wasn't really little. It was actually like a cliff. And then just resting on my little rock for the rest of the time being.

I know I ate dirt, tried to eat dirt and rocks and I came to the hospital with a big mouthful of dirt. That's all I remember.

(END VIDEO CLIP)

SAMBOLIN: Both teenagers were dehydrated when found in separate locations a day part. Jack also suffered a hand injury and scrapes and bruises.

BERMAN: Lucky kids.

Twenty minutes after the hour right now. What's old is new again at JCPenney, specifically we're talking about the CEO. More on the shake-up that has some investors scratching their heads, coming up.

(COMMERCIAL BREAK)

BERMAN: We are minding your business this morning. Stock futures are mixed. The Dow set for a lower open, the NASDAQ and S&P looking a little bit higher right now.

Shares of Alcoa in focus this morning after the aluminum maker reported better than expected profits.

SAMBOLIN: And also in focus, JCPenney. Christine Romans loves this JCPenney this morning.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: No, this is a story that will be a business school textbook case study for years to come. Ron Johnson, after 15 months as the CEO of JCPenney, one massive misunderstanding of Penney customers, he is out. Penney is not Apple and he learned the hard way and lost his job.

You know, what he did was he did away with sales and coupons, right? He redesigned the store experience, a new logo. He brought in Ellen DeGeneres as a spokesperson.

Customers, JCPenney's loyal customers didn't get it. They didn't get it at all. Sales fell 28 percent last year, including a whopping 40 percent drop during Christmas holiday season! JCPenney's, its board slashed his salary last week but it wasn't enough for some board members. Ultimately, they got their way, he lost his job.

They're pushing the reset button at Penney bringing in the old CEO Mark Ullman. Wall Street, by the way, you guys, is not happy with that choice. Wall Street -- I don't know what's worse, Ron Johnson is out stock rallies. So you feel pretty bad about that if you're Ron Johnson.

And then the old guy comes back, former leader comes back and the stock tanks.

BERMAN: Yes. Wall Street saying, really? The old guy?

ROMANS: Here's something really interesting about the Penney -- you know, Ron Johnson took an Apple brain and a target brain you know looking at kind of niche, cool, hip ways to sell things and he applied it to Penney. He took away for example the cash registers.

I just went into a little reconnaissance at one of these stores. And I saw people shoppers who didn't know where to put their purse while they were trying to dig for their credit card. You know, he tried to make an Apple experience for JCPenney and JCPenney shoppers wanted their JCPenney experience. They wanted value and they wanted familiarity. He took all that away and the customers ran.

This, I think, is going to be one of the leadership moves. Look, he has got a stellar retailing career. This is going to be -- until this point -- he is going to -- this is going to be like the new Coke debacle. You know? Trying to child an old, iconic brand and it backfired.

BERMAN: So, what's the one other thing we need to know about our money?

ROMANS: So, I'm still digging into the jobs report and a job situation. A lot of people concerned about jobs. Americans with college degrees still far outpace high school graduates when it comes to employment.

I want to show you some numbers. If you have a bachelor's degree or higher, your unemployment rate is 3.8 percent. And look at the participation rate, you're much more engaged in the economy. Only a high school diploma, much higher, more than double the unemployment rate.

And look at that, only 58 percent participation in the economy. That number -- bad, bad, bad, bad, bad. Go to school.

Don't believe this whole thing about a college degree isn't worth it. The numbers still prove that it's harder to get into the economy still, even with a degree. But if you don't have one, you're completely left behind.

BERMAN: Christine Romans, thanks so much.

ROMANS: You're welcome.

BERMAN: So, when you think spring it's probably about birds chirping and flowers blooming -- sounds like a Disney film -- not hail falling and tornadoes churning. More on this crazy weather, coming up.

(COMMERCIAL BREAK)