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EARLY START

Danger in the Skies; V.A.: A Systemic Failure?; Secretary; Wildfire Forces Hundreds to Evacuate; Kidnapping Suspect Denies Charges; Thai Military Stages Coup

Aired May 23, 2014 - 04:30   ET

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


(COMMERCIAL BREAK)

JOHN BERMAN, CNN ANCHOR: Breaking overnight, danger in the skies over Houston. Two planes come within a few hundred feet of disaster, nearly colliding minutes after takeoff. The thing is, this is the fourth time this week we're hearing this. And many are asking, is America's air traffic control system just broken?

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We've not just let them down, we've let them die!

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: More calls this morning for big changes at the V.A., as Congress blasts the deadly delays at hospitals, hospitals meant to serve those who have served their country. Eric Shinseki is promising to act, but can the V.A. secretary even keep his job?

BERMAN: Thousands of acres and growing. This morning, a huge fire in Arizona is threatening hundreds of homes and forcing families to evacuate. This as nature's fury slams us in the East. Tornadoes, heavy rain, even hail, big hail leaving a trail of destruction.

Welcome back to EARLY START, everyone. Great to see you today. I'm John Berman.

ROMANS: I'm Christine Romans. It is Friday, and we are all thankful for that, and it is 32 minutes after the hour.

Breaking overnight -- this is happening again -- for the fourth time this week, the fourth time this week, we're learning of a frightening near collision involving passenger jets with hundreds of people on board. This time, it involves two United Airlines jets flying out of Houston's Bush Intercontinental Airport, two weeks ago.

Both had just taken off from an air traffic controller told one to turn right, that was directly into the path of the other plane. They were just a few hundred feet apart and seconds from colliding when the controller realized the error and told the planes to turn again, avoiding disaster.

Listen.

(BEGIN AUDIO CLIP)

TOWER: United 601, stop your turn, stop your climb, stop your turn for United 601.

(END AUDIO CLIP)

ROMANS: The FAA claims it has taken steps to prevent this from happening again.

BERMAN: So, it's not just Republicans calling for the firing of Eric Shinseki, the embattled V.A. secretary is promising to fix the deadly treatment delays that are costing veterans their lives, but now some high-profile Democrats are saying the scandal should cost Shinseki his job.

Here's chief congressional correspondent Dana Bash.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Christine and John, V.A. Secretary Eric Shinseki was summoned to a closed-door meeting on Capitol Hill yesterday afternoon, not to meet with a Republican, but a frustrated Democrat.

And afterwards, Shinseki told reporters that he has not offered the president his resignation. He said, "You guys know me better than that." But his remaining support is tenuous.

Do you still think that he should be at the helm?

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I have not called for General Shinseki to resign, although I have to admit, I'm getting a little closer.

The reports that continue to come are appalling. And these are men and women who served our country, and -- we've not just let them down, we've let them die!

BASH: Congress is stepping up its investigation of the V.A., but three V.A. officials scheduled to attend a House Veterans Affairs Committee meeting yesterday morning didn't show up. And later in the afternoon, the V.A. general counsel scrapped a meeting with the committee chairman, Jeff Miller, after Miller demanded it be open to the press.

REP. JEFF MILLER (R), FLORIDA: We waited all day long. We called nine times for them to tell us whether or not they were going to come, and he never came.

BASH: All of this while the president's point person on V.A. troubles, Rob Nabors, traveled to Phoenix, the V.A. office where problems first surfaced, to interview the interim director, even as congressional investigators warn the problems know about now may just be the tip of the iceberg -- Christine and John.

(END VIDEOTAPE)

ROMANS: Thanks for that, Dana.

All right, whipping winds and bone-dry terrain giving firefighters all they can handle near Sedona, Arizona. A wildfire burning over 7,000 acres, the flames only 5 percent contained, not what you want to hear. A tense situation unfolding this morning with hundreds of homes and businesses in harm's way.

Let's get more now from Ana Cabrera.

(BEGIN VIDEOTAPE)

ANA CABRERA, CNN CORRESPONDENT: John and Christine, it's the extremely dry conditions that have firefighters really concerned. It's these pine needles, these dry pine needles that are blanketing the forest floor, providing a kindling of sorts for this fire that's now burning thousands of acres.

You can see that huge plume of smoke that's been blowing to the north. The winds have been a huge X-factor for firefighters as they work to try to contain this fire that's burning in very steep, rugged and treacherous terrain. So, firefighters have been relying a lot on the air support in some of those areas, dropping fire retardant to protect the homes that are on the northeast flank.

Still, 300 homes that are threatened right now. There are hundreds of fire crews that have arrived from six different states to help in this fire battle. At least 20 hot shot crews that are also joining in this firefight. Right now, it's a race to keep this fire away from the homes as it continues to spread with Mother Nature not lending any reprieve so far -- John, Christine.

(END VIDEOTAPE)

ROMANS: Sedona is so beautiful.

BERMAN: It is so beautiful.

ROMANS: It's so beautiful. It's just -- thanks for that, Ana. Tough to see it so little contained.

BERMAN: We do hope everyone out there is being safe.

Thirty-six minutes after the hour.

Another day of extremely dangerous weather on tap for millions of Americans. Severe thunderstorms and the threat of flash flooding in the forecast from Wyoming to Texas. And look, you can even see it there in east Oklahoma. Lightning and the potential for wildfires, we're also expecting a big problem with that in many of those drought- stricken areas.

(VIDEO CLIP PLAYS) ROMANS: That is tennis ball-sized hail. That sound is the sound of calling your insurance adjuster. That's in central and eastern Pennsylvania. It shattered car windshields, broke windows in buildings all over the town of Reading. Emergency management officials tell us there's a lot of damage but no serious injuries.

BERMAN: Look at those windows.

ROMANS: I know.

BERMAN: Look at those dents!

All right. Virginia hit hard by damaging wind, hail, driving rains. Tornado warnings late in the day sent people scrambling to find shelter in Richmond. You can see a whole lot of destruction, a lot reported throughout the state with trees down, streets and highways flooded and more than 20,000 homes without power.

ROMANS: A lot of property damage also being reported in Upstate New York. Thunderstorms packing ferocious winds and hail, ripping through Albany, Schenectady and Montgomery Counties. Many homes in the region devastated -- trees and power lines down all over the place.

BERMAN: This is a serious system here. Just look at the devastation in Kent County, Delaware.

ROMANS: Oh, my!

BERMAN: The homes there flattened by a possible tornado. Several structure collapses reported in the area. Roads are closed. Power is out in over 4,000 homes. The good news is no serious injuries were reported.

ROMANS: All right, Chad Myers this morning tracking the forecast and what you need to know for today -- Chad.

CHAD MYERS, AMS METEOROLOGIST: John and Christine, good morning.

Had an ugly afternoon yesterday, although it's better today in the Northeast. We have high pressure pushing some of that moisture away, pushing the humidity away, the heat away, and the potential for storms away, too.

Ninety in Atlanta, 96 if you get all the way down south in south Texas, down around Brownsville, 88 in New Orleans, 89 in Tampa and 91 down in Miami.

For tomorrow, things look wet again across parts of the plains. This is your Saturday afternoon in the heat of the day. That's why the showers pop up here. There won't be as many showers in the morning. Then, 72 for New York, 76 for D.C., and 86 in Atlanta.

For your Memorial Day weekend, not too bad. We go to 72, 76 and 82 for New York City. Now, believe it or not, Chicago's actually going to be warmer, and even San Antonio 87, 85, 86, and Orlando pleasant there, a couple of showers in the afternoon, as always. D.C., a few miles farther south than New York but significantly warmer, five degrees warmer every single day. St. Louis all the way to 88 for your Monday and pretty decent beach weather down across parts of the Southeast.

Atlanta, you'll see a shower or two on Monday. That's it.

John, Christine, back to you. Have a great day.

BERMAN: That Chad Myers, he's a good man. Our thanks to Chad.

Big news from HP. Hewlett-Packard says it will cut an additional 11,000 to 16,000 jobs after previously announcing plans for 34,000 layoffs. The once mighty computer-maker has run into a rough patch as consumers increasingly shift from PCs to mobile devices. The announcement came during an earnings report where an executive says the move will save an additional $1 billion a year.

ROMANS: Two days of protests against McDonald's over worker pay not falling entirely on deaf ears. Thousands demonstrated outside of the company headquarters in Illinois, demanding a wage increase. They want $15 an hour. The CEO, Don Thompson, responded, telling shareholders, "We respect the fact they want to challenge us relative to wages. We pay fair and competitive wages and provide job opportunities and training for those entering the workforce."

There are also complaints about the health of the food there. One woman stood up and said that Ronald McDonald is the new Joe Camel and why is the food so unhealthy for children? So, it was on wages, it was on health, a lot of different things -- a lot of different complaints at that meeting.

More on McDonald's coming up tomorrow on "YOUR MONEY." That's 2:00 p.m. Eastern here on CNN.

A look at an EARLY START on your money this morning.

Stocks lower across Europe. Futures here, look, S&P futures up one point. This is after a great day for U.S. stocks yesterday. The Dow rose 160. The S&P almost made a new record high.

Meantime, G.M. still the stock to watch. Shares are down 6 percent since the ignition switch recall was announced in February, but that doesn't really tell the whole story. G.M. set aside $1.7 billion to pay for the recall last quarter. That essentially wiped out its profit for the first part of the year.

And that money is turning into a stimulus of sorts for dealers. Not only is G.M. paying them to make costly repairs, they're getting all this new foot traffic, John, from people who are concerned about their cars. Those people can test one of the 35,000 loaner cars G.M.'s sent to dealers to deal with the recall, then they can benefit from the recall. They have employee pricing deals for anybody -- so, get rid of your recalled car, get a new one, right?

Morgan Stanley says if G.M. can convert just 1 percent of the foot traffic in the stores, it will more than offset of the recall to G.M. this quarter.

BERMAN: That's an interesting equation.

ROMANS: Think of the reputational hit to G.M., all the concerns about the safety of this company. It means more people going to the dealer and more people potentially turning in their 2008 car for something new.

BERMAN: Never thought of that. That's why I'm not in business.

ROMANS: I know. There's always an angle, right?

Did this woman go willingly and does that even matter? Startling, new developments and accusations in that California kidnapping. Wait until you hear what the suspected abductor is now claiming. That's next.

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ROMANS: An unusual case of the California woman found 10 years after being kidnapped and allegedly held by her mother's boyfriend. The victim was 15 years old when she says she was drugged, abducted and systematically beaten, raped and locked in a garage to keep her from escaping.

The suspect, 41-year-old Isidro Garcia, allegedly forced her to marry him, fathered a child with her. Now, his lawyers insist Garcia never hit the victim, never prevented her from leaving and the claims of abuse are being made up, the attorney says, because the couple is just going through a breakup.

(BEGIN VIDEO CLIP)

CHARLES FRISCO, DEFENSE ATTORNEY: Ten years have gone by and she never, ever told one person that something was afoul, whether it be a neighbor, whether it be an employer, whether it be an employee, whether it be a family friend, whether it be a friend who was a cop. Why is it that she never said anything to indicate that he did something wrong?

FARRAH EMAMI, DISTRICT ATTORNEY SPOKESWOMAN: Ten years ago, this victim was 15 years old, and the sexual assault of a child is a sexual assault, whether or not they agreed to it. In this case, we're not talking about consensual sexual contact. We're talking about forcible rape and we're talking about repeated sexual abuse, emotional abuse and physical abuse. And so, it really doesn't change the circumstances of the criminal case, because this is a victim, no matter which way you spin it.

(END VIDEO CLIP)

ROMANS: The victim tells a Los Angeles TV station she feels happy and blessed to be back with her family.

BERMAN: Still a lot to learn in that case.

ROMANS: Yes.

BERMAN: Particularly what happened 10 years ago and now a 15-year-old just disappeared like that with a man who lived in the house.

Dallas Mavericks owner Mark Cuban may have gone too far in an interview addressing his own prejudices in the wake of the Donald Sterling scandal. Some people think he did, others not so sure. What he did is he remarked that if he sees a black kid in a hoodie late at night, he'll cross to the other side of the street. He also said if he sees a white kid all tatted up, he'll cross to the other side of the street.

Mark Cuban took to Twitter to offer an apology, he said, "In hindsight, I should have used different examples. I didn't consider the Trayvon Martin family, and I apologize to them for that."

This was in the context of a two-minute discussion about the issue of prejudice and how he deals with it as an entrepreneur. And what he's talking about, or what he was talking about was the need to have a dialogue and discussion about it. And while he may have used clumsy words, he may have proven the point of what he was trying to say.

ROMANS: And Mark Cuban is probably one of the most unfiltered executives.

BERMAN: Yes.

ROMANS: He says what he thinks and gets himself in trouble actually a lot.

BERMAN: Doesn't mean that sentence was not insensitive.

ROMANS: All right. Coming soon to Facebook, more privacy. More privacy. Under pressure, the social network is changing its contentious setting for new users who will by default only share their posts with family and friends. Existing users are being encouraged to get a privacy checkup.

We need to do this during the break. I need a privacy checkup.

BERMAN: That's the most exciting offer I've heard in a long time!

ROMANS: Berman -- you can opt out of sharing posts publicly with the social network's 1.2 billion users. The point is, I'm not very good with the privacy settings.

BERMAN: We'll just see about that during the break.

This morning, the U.S. is threatening to cut off aid after Thailand's military ousted the government. A dramatic coup just hours after meetings meant to solve a political crisis there. We're live in Bangkok with the latest, next.

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BERMAN: Thailand now under the complete control of the militaries, a coup. Army officials taking at least 25 political leaders into custody while terminating most of the country's constitution. Secretary of State John Kerry denouncing this coup, saying there's no justification for it, and they're threatening to suspend $10 million in aid to Thailand.

Let's get the latest now from Paula Hancocks live from Bangkok, which is now in the control of the military.

PAULA HANCOCKS, CNN CORRESPONDENT: That's right, John. I'm standing just outside the army club, and this is the site where that coup was carried out in front of our very eyes on Thursday.

So, now, Thailand is officially under another military coup d'etat. That's here in the coming minutes, we are expecting to see some of the foreign diplomats from around the world arriving. They have been summoned to meet with General Prayuth, who is in control with the military itself.

We spoke with the Ambassador Kenny to Thailand earlier on CNN and she said she would not be able to attend, but she is sending someone junior. Obviously, it is very politically sensitive for ambassadors around the world, including the U.S. ambassador, to come and be summoned by a general who has just ripped up the constitution and staged a military coup. So, it will be very interesting to see who is here.

Now, we know that the former prime minister, Yingluck Shinawatra, who was ousted from power just two weeks ago, now she's inside one of the army barracks. She's basically been summoned.

She reported to military officials. She's been there for a few hours. We don't know what will be happening to her, whether or not she will be detained.

About 100 other political parties as well, political leaders on both sides of the divisions here in Thailand are also being summoned.

Behind me, you can see some of the cars coming up now, some of the diplomats from around the world arriving to find out exactly what is going on. General Prayuth on Thursday said he would guarantee the safety of foreigners. He would guarantee of diplomats. It will be very interesting to hear what's going on in that meeting in the coming minutes -- John.

BERMAN: Very interesting to see the speed and acquiescence of that society in the coming days.

Our Paula Hancocks in Bangkok, thanks so much.

ROMANS: All right. Coming up, in the market for a new house? The U.S. cities where you'll get the most bang for your buck, right after the break.

BERMAN: And coming to CNN, a new series from executive producers Tom Hanks and Gary Goetzman. "The Sixties," the decade that changed the world, the space race, the Cold War, civil rights, and oh so much more. The 1960s, they really reshaped American lives in ways that affect us still today.

Be sure to watch or set your DVR for the premier. This is awesome, folks. It starts next Thursday at 9:00 Eastern and Pacific, right here on CNN.

(COMMERCIAL BREAK)

ROMANS: Good morning. Let's get an EARLY START on your money for the final day of the week, all right? It was almost records yesterday. The S&P almost made it. And you can see futures are up a little bit this morning.

The Dow still slightly lower for the year. It's down about 0.2 percent. So, wow, certainly not like last year, when you just had double-digit gains going strong all year, but almost near records for the S&P.

The most profitable airlines in the world are once again American. After a decade of dealing with bankruptcies, mergers, high fuel prices, angry customers, Delta is now the most profitable airline in the world, followed by American, United and Southwest. That's according to data compiled by Bloomberg.

Just five years ago, Singapore Airlines and Lufthansa were top earners. U.S. carriers recovered by limiting seating capacity, also by, yes, adding fees, and lots of fees. In 2013, the airline industry collected more than $6 billion in baggage and change fees, and that is helping lead U.S. airlines back to profitability.

All right, where can you afford to buy a house? If you make 30 grand, you can afford a home in Cleveland. It's also roughly what you need to buy in Pittsburgh.

According to a new study, low interest rates have kept homes affordable through the center of the country, especially the Rust Belt. If you want to live in coastal cities, you're going to need a bigger paycheck to afford the house. You'll need at least a $90,000 salary to buy a house in New York and more in San Francisco, $137,000 to enter into the world of ownership. Isn't that something?

BERMAN: It is not cheap.

ROMANS: No.

BERMAN: All right. EARLY START continues right now.

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