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North Dakota Faces New Storm; Last Chance For U.S. Automakers?

Aired March 30, 2009 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: Breaking news: They have already been through hell and high water. Now, just when they thought the river that runs through their city was going down, the people of Fargo, North Dakota, watch a blizzard blow in, and wait to see if the levees hold.

They watch, they wait, and an awful lot of volunteers work right now, filling sandbags, trying to save their homes and their lives.

Gary Tuchman is there on the front lines tonight in Briarwood, North Dakota, just south of Fargo.

Gary, what's the situation?

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Well, Anderson, for the people who live in the Fargo area, it's like being in meteorological house of horrors.

I have never seen such a strange combination of weather. I have covered a lot of floods, but never with a snowstorm. Covered a lot of snowstorms, but never with a flood. We have it all right now.

Now, right now, it's relatively quiet. And that's because -- we will take a look at the radar -- you can see, the heaviest snow -- and we have had five inches over the last couple of hours -- is to our east. There's a lot more snow coming from the west.

They expect up to 10 inches of snow. So, they're dealing with snow. They're dealing with heavy wind. They're dealing with floodwaters like here in this neighborhood in Briarwood, just south of Fargo, in which most of the houses are now under water.

There's a lot of vulnerability here still. The water levels have gone down. The dikes are holding. But here's the concern. Because of this heavy snow, because of the wind, they don't know what will happen to these levees and these dikes.

The fact is, there's not a lot of history having snow, having wind and having floods at the same time. So, everyone's waiting to see what happens here tomorrow -- Anderson.

COOPER: And that snow looks like it's heading right toward you, Gary.

Well, we're going to check in with Gary from the flood zone in just a few minutes. But the other big story we're following tonight, General Motors and Chrysler. President Obama telling them your turnaround plans are not good enough, giving GM 60 days to do better, or lose federal support, asking for and getting CEO Rick Wagoner's head, giving Chrysler 30 days and no alternative but to merge with another company, probably Fiat, laying blame and taking responsibility.

But should the government be firing CEOs?

First, the president in his own words.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's a failure of leadership from Washington to Detroit that led our auto companies to this point.

Year after year, decade after decade, we've seen problems papered over and tough choices kicked down the road even as foreign competitors outpaced us. But we've reached the end of that road.

And so today, I'm announcing that my administration will offer GM and Chrysler a limited additional period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional taxpayer dollars.

During this period, they must produce plans that would give the American people confidence in their long-term prospects for success.

GM has made a good-faith effort to restructure over the past several months, but the plan that they put forward is, in its current form, not strong enough.

As an initial step, GM is announcing today that Rick Wagoner is stepping aside as chairman and CEO. This is not meant as a condemnation of Mr. Wagoner, whose devoted his life to this company and has had a distinguished career, rather, it's a recognition that will take new vision and new direction to create the GM of the future.

Now, while Chrysler and GM are very different companies with very different paths forward, both need a fresh start to implement the restructuring plan they developed. That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger.

Let me say it as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always. Your warranty will be safe. In fact, it will be safer than it's ever been because, starting today, the United States government will stand behind your warranty.

Now, these efforts, as essential as they are, are not going to make everything better overnight. There are jobs that won't be saved. There are plants that may not reopen. There's little I can say that can subdue the anger or ease the frustration of all whose livelihoods hang in the balance because of failures that weren't theirs.


COOPER: That was the president this morning.

Chief business correspondent Ali Velshi now on how the president's plan affects your money, your future.

Ali, a lot of moving parts with this -- this auto mess. We want to hit three major points with you.

First off, what does this mean for the millions of car buyers and millions more taxpayers out there?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: All right, and there are millions fewer car buyers than there were, let's say, a year ago.

But you just heard the president say warranties will be honored. One of the interesting things about car buyers, some people aren't buying cars because they can't get credit, others because maybe they have lost a job or they're worried about losing a job.

But there might be some who are not buying a car from General Motors or Chrysler because they're concerned that, if the companies were to go under, their warranties may not be offered. So, the government is standing behind those warranties.

Typically, auto warranties are a separate part of the business. And, as a result -- and they're often very profitable parts of the business. The government is saying they will take care of that. Number two, more taxpayer dollars, not new taxpayer dollars -- this is still part of the same bailout -- but if these two companies were to come back with a viable plan -- and, as you heard the president say, the ones that they came up with are not viable over the long term -- if they do, it will mean further investment.

But the White House is saying they don't think the plans that Chrysler and General Motors have come up with are strong enough to warrant further money until they know that they can recover.

COOPER: But continuing to keep these companies afloat, I mean, it affects jobs across the country.

VELSHI: Right. So, we talked about the warranties, but, ultimately, the bigger story here is less about the car buyers and more about the jobs across America.

We know there are lots of auto jobs. The automakers have said the failure of even one of them could trigger a ripple affect that could put three million people out of work. These are the states that are most associated with auto workers. These are the states that have more than 100,000 auto workers in them, California, Texas, Florida, largely because they're very populous states.

But Michigan, Indiana, and Ohio, that is really where the majority of those auto plants are. These are states that have more than 100,000 jobs connected to automaking, auto supplies or auto dealerships. And I have to remind you there are more people employed at dealerships than actually in the auto business.

But take a look at this. If you go to states that have more than 10,000 auto jobs connected to them, you have got nearly the whole country. There are auto jobs in every single state and -- and the district of Columbia. But the bottom line is, this is the effect if an automaker were to fail. You could see jobs lost across the country -- Anderson.

COOPER: Government in the auto business firing CEOs, there's a lot of concern out there about this. What happens if this doesn't work? And will it work?

VELSHI: Well, there are two things going on right now. One is, can these automakers restructure? Can they get their price -- their costs lower? Can they lower their debt? Can they get investors? That's a challenge that's been put to both Chrysler and General Motors.

But here's the other one. And that is that cars are just not selling. This is the chart of the last year. The yellow is Chrysler. The blue is General Motors. The bottom line is, people are buying fewer cars. And that is not right now as reflective of the state of the U.S. auto industry. This is something that's going on across the world.

This is because of credit problems, as we mentioned, and the fact that, with a falling economy, with jobs being lost, or the fear of jobs being lost, buying a car may not be at top of everyone's priority list. They may just make their old clunker go a little bit longer.

So, that's a challenge. These companies have to get their act in order. But the economy has to come back a little bit in order to help these companies out. So, it's a big, big challenge for the automakers and at this point for the government -- Anderson.

COOPER: Yes, no doubt about that.

As we mentioned, President Obama is taking heat tonight for demanding Rick Wagoner's resignation. There's that kind of anger. Then there's the kind that has nothing to do with presidents or CEOs or beltway politics.

It's the kind of captured by local station WWMT outside a Chevy dealership in Wayland, Michigan, that had just announced it was closing and that everyone was losing their job. Take a look what happened, employees fighting each other. It's actually the second fight of the day there. A short time later, one of the men involved came and spoke to the camera.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: It doesn't really matter how hard that you work, because there's always somebody a little bit above you that has the right to control every decision, every ounce of energy that you put forth effort to. Don't you have the right to be a little bit mad when somebody says, hey, we're all done?


COOPER: "Digging Deeper" now with senior political analyst David Gergen, economist Stephen Leeb, author of "Game Over," and ethics guru Vince Crew, author of "Everyday Ethics, Everlasting Consequences."

David, what do you make of this? I mean, it has happened before. But we're kind of in unchartered waters. Firing of CEOs by the government?


And I think that we're going to see more of it, Anderson. The -- the toughest part of this is that the government had no good choices. President Obama had no good choices. And what they have decided is, we couldn't get the bondholders to agree to any kind of out-of-court settlement.

We couldn't get the UAW, the automobile workers. We're going to force them. We're going to give them 60 days to do this or we're going to take them into bankruptcy and do it through a court.

I -- all of that is understandable. It's tough. It means more layoffs are coming. I think the surprise was firing Rick Wagoner, a man who, as CEO, had done a very good job restructuring the company. And a lot of the congressional delegation, Republicans and Democrats, expressed surprise.

And there is this question now of a double standard about, why do you treat the automobile companies in one way and treat the banks in another way? I think that's going to be very tough politics for the Obama administration.

COOPER: Vince, what about that? I mean, there are lot of -- I was just in Detroit two weeks ago. And a lot of the autoworkers there are saying to me, look, there's a complete double standard. A lot of these CEOs on Wall Street have cost the government a lot of money. They have gotten more bailout money. Their companies are tanking probably even more than some of these auto companies. They're not being fired.

VINCE CREW, AUTHOR, "EVERYDAY ETHICS, EVERLASTING CONSEQUENCES": Well, you're right, Anderson. That's happening.

And, also, when -- when people are looking at these complex situations about the economy, and the economists come out and they say, well, something had to be done, people go, wait a second. In my own personal life, if -- if I have a failed business or if I make bad decisions, there are repercussions for that. Why aren't these guys having repercussions? And when it comes to dismissing a CEO, that's the job of a company board, not the president of the United States.

COOPER: Steven, is there a double standard here?

STEPHEN LEEB, ECONOMIST: Not really, I don't think.

I mean, basically, I don't think the government had much choice. I mean, it's really AIG fallout, Anderson.

The public, I think, would be furious if we were giving ever more money to a company, and sort of rewarding, in a way, the CEO who at the helm when the company basically went under and required all this money. I mean, it has to be publicly acceptable.

And in answer to letting the company fail, that's just not an alternative. I mean, how many more home foreclosures would you have if you have a million people out of work? That's just not doable.

COOPER: I know David wants to disagree with you here, but I -- but I have just got to take a short break.

We're going to take a commercial break. And we will have more with our panel next.

Also, let us know what you think on the blog and the live chat happening now at

Also, Erica Hill is back. Yay! Check out her live Webcasts during the breaks tonight.

Also ahead, new answers -- why a gunman may have opened fire at a nursing home in North Carolina, that and the 911 call from inside the facility as the killer stalked his victims.


UNIDENTIFIED 911 DISPATCHER: Are they inside the nursing home?

UNIDENTIFIED FEMALE: Yes. Yes. Yes. They are up there shooting. I heard gunshots!

UNIDENTIFIED 911 DISPATCHER: OK. Is anybody injured?

UNIDENTIFIED FEMALE: I don't know. I don't know.


COOPER: We will have more of the tapes for you.

And, later, Europe is getting ready for Michelle Obama, never mind the president. There hasn't been this kind of buildup since Jackie and JFK -- a preview of the first couple's first trip overseas.

And the global controversy over Madonna adopting another child from the African country of Malawi -- see why the story is causing such heat and why it make take a judge to sort it all out.

Stay with us.


COOPER: We're talking about president -- the presidential ultimatum to General Motors and Chrysler and the administration's decision to force out Rick Wagoner, a GM -- the GM CEO.

Contrary to the outcry today, he is not the first corporate head to role -- the Bush administration replaced the heads of Fannie Mae, Freddie Mac and AIG last September -- nor, says the president, is a sign of any great hankering to meddle in private enterprise. This is what he said.


OBAMA: Let me be clear, the United States government has no interest in running GM. We have no intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.


COOPER: We're back now with David Gergen, Stephen Leeb, and Vince Crew.

David, the government doesn't want to run GM, but, I mean, they're close to running GM right now.

GERGEN: They sure are.

COOPER: And if they're firing the CEO, I mean, how -- this is just politics, isn't it?

GERGEN: The decision to fire Rick Wagoner was a purely political decision. It...


COOPER: For the president to look tough?

GERGEN: For the president to look tough. He was an easy shot. I think Steve was right. I think they're -- they were running a little scared because of the AIG thing. And, so, they thought, let's just get rid of Rick Wagoner.

But, you know, the truth is, he gave GM 60 days to get it straightened out. He's brought an insider to do it. Now, it would be different if he brought somebody from the outside and said, you go restructure it. He promoted the CEO to run it.


GERGEN: They shopped the job for its chairman on the private sector. They couldn't get anybody to take it.

COOPER: Vince, you say they should have just let them -- let them fail?

CREW: Well, it happens every day of the -- of the week.

Companies who have flawed models, companies who are -- are mismanaged, they fail. Companies who aren't and who -- who are ethically bound and -- and perform and make profits through principled decisions, they succeed.

COOPER: What about the argument that this company's just too big to fail? You don't buy it?


CREW: If it -- if it was too big to fail, it wouldn't. And the fact of the matter is, it is. It has been failing for years.

And instead of allowing it to take the natural order of things, which many of your listeners' businesses would have to do, the government steps in and says, well, we're going to prop you up a little bit, but, oh, maybe we will do a little political posturing, and we will pick this guy and we will pick this issue.

The government has no business in here.

COOPER: But, Stephen, is what he says actually true? I mean, it sounds good when you just say, well, it's -- if it's too big to fail, it wouldn't. Is that true?


I mean, these companies -- first of all, just to give you a size, Anderson, give you a scope on how large these companies are, Chrysler and General Motors represent nearly 2 percent of this country's GDP, maybe 1.5 to 1.8 percent. That's massive.

I mean, just think, this country has a good year if it grows at 2 percent, 2.5 percent. That's what these companies represent. So, we take that 2 percent or 1.5 percent out of the GDP at a time when everything else is falling apart, you will have such chaos, it won't be -- you won't be able to pick up the pieces.

COOPER: So, what do you think of the plan now, the 60 days? They have 60 days to basically restructure.

LEEB: Well, I think -- I think what they're doing now makes a lot of sense.

I agree with David. Firing Wagoner is political. There's no doubt about it. But he's trying to create a streamlined company, a company that can respond very, very quickly to new demands. People, sooner or later, are going to need fuel-efficient cars. And we need companies that can, you know, tool up and manufacture them very, very quickly. There's another crisis coming down the road. And I think President Obama definitely sees it, definitely gets it. I think he's making the right decisions.

COOPER: David?

GERGEN: I think he's making a fundamentally right decision about giving them 60 days, giving Chrysler 30 days, and then taking them into bankruptcy if they can't make it.

I just disagree with the Wagoner decision. And people say, well, you're -- it's it's a double standard. You know, you're treating the banks much better. This is going to send a shudder through the banking community, "If the government can be capricious here, they will be capricious in dealing with us," and make them even more, I think, reluctant to play.

COOPER: And, Vince, that's your fear?

CREW: And that's it. That's absolutely it, agreeing with David here.

When the president of the United States can -- can fundamentally interject his -- his power, his authority, his -- his advisers' ideas into the private sector, we are on that proverbial slippery slope, the -- the -- this is not the audacity of hope. This is the audacity of power.

And those of us who -- who voted for this man had no idea that this was what we were hoping would happen. And those of us who didn't vote for this man feared that it would.

COOPER: Very briefly, Stephen.

LEEB: OK. He's doing now what he has to do in order so he doesn't have to do a lot more later. If he lets GM fail, you will end up seeing the government so much part of everyone's life, it will make today look like a picnic.

COOPER: All right, we have got to live it there.

Good discussion.

Stephen Leeb, Vince Crew, thank you.

David Gergen, as well, thank you.

Up next: President Obama's trip tomorrow. Europeans were happy to see him elected president. So, why could the new president be facing a pretty hostile welcome? It has a lot to do with money. We will have details on that, as well as Michelle Obama's plans in Europe. Certainly not going to get a hostile reception there.

Also, more on our breaking news -- facing worsening weather in the flood zone. We will check back in with Gary Tuchman on the flood lines, were you will meet some people who are still trying to forget the last major flood there.

Also, John McCain and Sarah Palin, is the love lost? Did you see this? Listen.


DAVID GREGORY, MODERATOR, "MEET THE PRESS": In terms of future leaders of the Republican Party, would you like to see Sarah Palin become president?


COOPER: His answer ahead on 360.


COOPER: Thomas Jefferson famously said that he lost friends daily during his presidency. President Obama has been in office now 70 days. Has he lost any friends yet?

Well, that's what CBS's Bob Schieffer asked Mr. Obama on "Face the Nation" yesterday. Here's what the president said.


OBAMA: I don't think I have lost any friends. But I'm sure I have strained some friendships.

And, look, this -- this is an invigorating job. In some ways, I feel incredibly fortunate to be in this job at a time where the presidency really matters. I'm -- this is not a caretaker presidency right now. Every decision we're making counts. And my team understands that.


COOPER: President Obama's poll numbers remain high, both in the United States and across Europe.

But popular isn't a free pass, something the president is learning as he heads to London tomorrow for the G-20 economic summit.

Candy Crowley has all the "Raw Politics."


CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): President Obama is a popular man abroad -- U.S. policy, not so much.

CHRYSTIA FREELAND, "THE FINANCIAL TIMES": You might even go so far as to call an ideological rift between the Europeans and the Americans.

CROWLEY: The rift is over global recession. The president wants more countries to put more money into their own economies, a la his stimulus plan. OBAMA: We don't want a situation in which some countries are making extraordinary efforts and other countries aren't, with the hope that, somehow, the countries that are making those important steps lift everybody up.

CROWLEY: Reaction has been cool to hostile. The outgoing Czech prime minister blistered the idea and the U.S. recovery plan.

MIREK TOPOLANEK, CZECH PRIME MINISTER (through translator): All these steps, their combination and their permanency, is a way to hell.

CROWLEY: Rather than putting more money into their economies, many countries want tighter financial regulation. Complicating things, many heads of state are less inclined to follow the U.S. lead, blaming America for the worldwide recession. Consider this screed from the Brazilian president.

LUIZ INACIO LULA DA SILVA, BRAZILIAN PRESIDENT (through translator): This crisis was not created by blacks, nor Indians, nor poor people. It was a crisis that was created and spread throughout the world due to the irresponsible behavior of white people, blue-eyed people, that thought they knew everything.

CROWLEY: Others have made a similar point, without the racial assault. Bottom line, that whole capitalism, anti-protectionism, deregulation combo has lost some shine.

There is risk President Obama could leave empty-handed. But observers say the bar for success is low. A communique with broad language on stimulus, financial regulation and protectionism will do.

FREELAND: And I think what we're going to see coming out of this summit is much less really concrete actions and a concrete plan, and much more a focus on a show of global unity, which, in and of itself, could be reassuring for the market.

CROWLEY: Considered the most popular U.S. president abroad since JFK, President Obama is not likely to lose his shine, regardless of what happens at the G-20. He will most certainly see streets lined with supporters. But he will also see something else.

UNIDENTIFIED MALE: It's capitalism's Waterloo. Come to the revolution 1st of April.


COOPER: France's president is now threatening to walk out of the summit because of his opposition to Obama's plan.

That's a -- that's pretty strong reaction. How big a rift is this?

CROWLEY: Well, you know, look, I -- these -- I have been to a lot of these economic summits. And there are always these sort of rifts going in. They always tend to sit down across the table, realize that there are some global implications here, and come up with something that is passable, which is not easy when you have got 20 heads of state sitting around a table.

You have to remember that there are two audiences here. There is the -- sort of the global audience, which all of these heads of state want to try to reassure. And then there's the hometown audience. And I think that's where President Sarkozy is going here: I'm a tough guy. I'm going to go. I'm going to stand up for what we need.

There are already people saying -- because what Sarkozy wants is sort of an uber-regulator, someone that watches over the global economy. England has -- has rejected that. The U.S. pretty much thinks it's a bad idea.

Something will come out about regulation. It will probably be enough to satisfy President Sarkozy. It's -- it's a -- it's sort of posturing prior to getting into the summit.

COOPER: In your piece, though, you know, everyone seems to admit, look, not much is going to come out of this, maybe a paper statement that's supposed to instill confidence.

But, if everybody knows nothing really came out of it, other than this paper statement, how is that going to instill any confidence?

CROWLEY: Well, because it does show world leaders together, trying to come up with something that might work. There are understandings.

But, in the end, Anderson, all these people are going to go back to their countries and do what they want to do. So, I mean, that's the bottom line.

COOPER: Is this the one where they all wear the funny shirts?


CROWLEY: They -- they can. But, you know, it is, after all, London.

COOPER: That's true.


CROWLEY: And I haven't seen all that many funny shirts in London.


COOPER: And everyone's -- everyone's -- everyone's lost their shirts. So, no, I guess...


CROWLEY: Exactly.

COOPER: ... we can't afford new shirts.

CROWLEY: Exactly.

COOPER: All right, Candy, thanks.


COOPER: Coming up next on 360, breaking news: fear of more flooding in Fargo, as a dangerous new storm is moving in, why snow and wind could soon be driving the floodwaters -- a live report from Gary Tuchman ahead.

Also ahead, voices of terror -- 911 calls from inside that nursing home as a gunman opens fire.

And, later, stealing the spotlight -- it's President Obama's first trip to Europe, but it's Michelle Obama who is making all the headlines over there -- the story ahead.


COOPER: Well, in case you're keeping track at home, John Vause, senior international correspondent, just e-mailed me to tell me it's the APEC Summit which is the funny shirt summit.

All right.

We want to update you on our breaking news out of Fargo, North Dakota, where there are new fears the Red River is going to overflow. As we told you at the top of the hour, a snowstorm has been hammering the area. Even before tonight, engineers were worried the levees holding back the swollen river would fail.

Remember, the -- the river -- the river crested this weekend. It left city -- parts of the city under water. It could have been much worse, though. Now, apparently, the threat has returned -- or a new kind of threat.

Gary Tuchman has the latest -- Gary.

TUCHMAN: Well, Anderson, here in the Red River Valley in North Dakota and Minnesota, you have a situation where you have flooding. But now you also have heavy snow and wind, very unusual outdoor circumstances to have all combined. It's almost biblical-sounding.

But the situation is this. Look at the satellite loop. Heavy snow came in here, dropping about five inches in the Fargo area the last five hours. It's let up a little bit, but more is coming from the west. It's supposed to last through tomorrow, up to 12 inches of snow.

And there's great concern that the snow and the wind can compromise the levees that have been built.

Now, the water levels have gone down. Lots of regions in this area have been very lucky. But other towns like this one have been rather unlucky.


TUCHMAN (voice-over): The Red River has not gone as high as expected. But that's bittersweet in a tiny town just south of Fargo. Because in Briarwood, population just shy of 100, it went plenty high enough.

(on camera) One of the charms of Briarwood, North Dakota, is that it's by the river. But now much of it is in the river. It also flooded here in 1997 and took a long time to clean up and rebuild.

Now a little over a decade later, people have to do it again. There are only 26 homes in this affluent town. Eighteen have been flooded.

UNIDENTIFIED MALE: When you love an area this much to live here, this is some of the stuff you have to put up with.

TUCHMAN (voice-over): Mike is one of the lucky ones.

UNIDENTIFIED MALE: Forty years of living on the river. You kind of know what to expect.

TUCHMAN: And so is his friend Paul. They and both their families live in two of the eight dry houses. So they are walking through the 34-degree water with their boat in case the water gets too deep so they can call their evacuated neighbors to let them know about the flood damage to their homes.

UNIDENTIFIED MALE: I would say a foot to a foot and a half you're looking at. Don't you guess, Paul?

TUCHMAN: They are talking to the owners of this home, Mike and Lauren Falkner, who had to evacuate.

LAUREN FALKNER, BRIARWOOD EVACUEE: We left by boat. And the currents were already so strong. And so we took, you know, one small suitcase, a laptop and a couple of small bags.


TUCHMAN: The water levels are down. Here you can see the icicles where the water was this weekend, about two feet above where the level is now. But the damage has been done inside the homes. The Falkners have flood insurance, which will cover two-thirds of the price of their home. But they have no coverage for what's inside it.

Most people in the Fargo area near the river have no flood coverage at all.

From what they hear, the Falkners don't know if their home will be inhabitable again.

L. FALKNER: Got to tell you, Mike has just been a rock.

MICHAEL FALKNER, BRIARWOOD EVACUEE: Well, it's been tough on both of us, but it'll be OK. It's North Dakota. We all come back. We don't wait. We take care of ourselves.

L. FALKNER: Might be -- might be in a different form when we come back, but we'll still be here.

M. FALKNER: We'll make it through. It's no big deal. We'll make it through. So thank you. Thanks a lot.

TUCHMAN: To the people who live here, Briarwood is far more than a typical town.

UNIDENTIFIED MALE: It's peaceful. It's a great community. It's -- the kids are safe out here. And it's just our own little piece of heaven.

TUCHMAN: And that's one of the reasons families like the Falkners are going through a private hell.


COOPER: So I mean, is the worst over in this area? Are people worried it could actually get worse?

TUCHMAN: You know, Anderson, everyone thought the worst was over, because the levels were going down. And that was good news. But this is kind of unprecedented. I mean, I've covered a lot of floods. But it's usually very warm outside. You don't ever have snow. You don't ever have winds. So it's kind of like a case study that hasn't been studied before.

The experts aren't quite sure what effect the snow and the wind will have. The snow they don't think will add to the river level, because it's not going to melt; it's very cold. What they're concerned about, though, is that the combination of the heavy snow, the heavy wind could compromise the levees. And therefore, the levees could collapse and allow the water to come in. So everyone's just kind of holding their breath and waiting to see what happens tomorrow.

VELEZ-MITCHELL: Gary, you are -- as you said, you have covered a lot of floods. You're, of course, engaged in the time-honored tradition of cable news, standing in water for no real reason. I seem to remember you being made fun of by Jon Stewart. I think it was last year. If only we had the tape. We do. Let's watch.


JON STEWART, HOST, COMEDY CENTRAL'S "THE DAILY SHOW": The water was up to reporters' ankles. The water was up to reporters' knees. The water was up to reporters' thighs. No! The mind-boggling waist Shot.

"I remember in 2008 the water got so high it went right up to Gary Tuchman's nipples."


COOPER: Gary, thankfully, it's nowhere near your nipples tonight.

TUCHMAN: No. It is not anywhere near my nipples right now, Anderson. But I will tell you. I argue this to everybody, including my own family. If we don't go in the water, you don't know how deep it is. It could just be a puddle if we're not in it. And this demonstrates to our viewers -- I'm trying to give the best defense I can -- how deep this water gets in these flood situations.

COOPER: OK. Gary, appreciate it. Thanks very much.

Coming up next, Madonna making headlines again. She's in the country of Malawi, wants to adopt another young child. But is it really in the best interest of this little girl who she wants to adopt? Strong opinions on both sides. We'll let you decide. We'll give you the facts, as always.

And a terrible story. A gunman opening fire in a nursing home on Sunday, bringing heartbreak to a small town. Tonight you'll hear the 911 call that may have saved some lives.



UNIDENTIFIED FEMALE: Hurry! Hurry! Somebody's shooting.

UNIDENTIFIED FEMALE: They're on their way, ma'am. They're on their way.

UNIDENTIFIED FEMALE: Hurry! Hurry! At the rest home!

UNIDENTIFIED FEMALE: Ma'am, they're on their way.

UNIDENTIFIED FEMALE: They're close, they're close!


COOPER: Madonna is back in Malawi, trying to adopt a second child from the African nation. Now, she reportedly wants to become the parent of a 4-year-old girl. The court is going to decide this Friday if she can. For now, her plans are on hold. They're also under fire.

There have been protests in Malawi from those who believe the singer is receiving special treatment from a government that only approved 10 adoptions to the U.S. over the last 10 years.

And tonight one children's rights group said the young girl is better off in Malawi, not with Madonna.

More now from David Mattingly.


DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): In search of her fourth child, Madonna entered a courtroom in Malawi, under a familiar glare of controversy. If successful, it would be her second adoption from this impoverished African nation. But not everyone believes that this is the best thing for the child.

DOMINIC NUTT, SAVE THE CHILDREN UK: The majority of cases, orphans -- so-called orphans who are, in fact, not orphans, who have at least one parent living, and even those that don't, have a wider family that can look after them. And we believe that children in poverty should be best looked after by their own people in their own environment.

MATTINGLY: CNN has not confirmed the child's family information. News reports say she's a 4-year-old girl named Chifundo James. Her mother reportedly died shortly after giving birth, and she has a grandfather and two uncles.

Just like in 2006, when Madonna adopted a 13-month-old boy named David, her visit to Malawi is a collision of two worlds. Madonna's private jet touched down in a country where more than 6 out of 10 live on less than $2 a day.

UNIDENTIFIED MALE: How does it feel to be back in Malawi, Madonna?


UNIDENTIFIED MALE: Can you tell us why you're adopting again, Madonna?


UNIDENTIFIED MALE: Can you understand people's reservations about it, seriously?

MADONNA: No. It's none of their business.

MATTINGLY (on camera): Madonna's spokesman in New York doesn't have anything to say about the criticism right now either. But that may change later in the week. The judge in Malawi is expected to rule on Friday, and Madonna will have to be present.

(voice-over) For the child it would be the change of a lifetime. If she stays in Malawi, the average life expectancy for women is just 43. There's a less than 50/50 chance she will learn to read and write.

AUSTIN MSOWOYA, LAW COMMISSION OF MALAWI: If you project 20 years from now where will the child be if the child is left in the orphanage where it is, or if it gets a chance to get an education with Madonna.

MADONNA: People always ask me why I chose Malawi.

MATTINGLY: And Madonna's connection to Malawi and children goes beyond adoption. She stars in a documentary calling attention to children orphaned by AIDS. It is a new kind of performance for the pop superstar, a role that is now apparently very personal. David Mattingly, CNN, Atlanta.


COOPER: Well, let us know what you think. A lot of folks talking about this on the live chat happening now at

Just ahead, the desperate 911 calls made as a gunman made his way through a nursing home. Recordings released today. We're going to have them for you in just a moment,

Also, a dicey question for Senator John McCain about his former running mate, Sarah Palin.


DAVID GREGORY, NBC NEWS: In terms of future leaders of the Republican Party, would you like to see Sarah Palin become president?


COOPER: What was his answer? That is coming up.

Plus, breaking other traditions at 1600 Pennsylvania Avenue. The Obamas are redecorating, but on their own dime. What about the $60,000 rug that President Bush left behind? Will it stay or will it go? Find out in a moment.


COOPER: New details tonight in a story that has shattered a quiet Sunday morning in a North Carolina town.

The first reports across the news wires were disturbing enough. A gunman had opened fire inside a nursing home, killing eight people before he was stopped. The suspect is now facing eight counts of first-degree murder. Tonight we have recordings of the 911 calls made during his rampage.

Here's Joe Johns.


JOE JOHNS, CNN CORRESPONDENT (voice-over): We couldn't see the terror inside the nursing home, but we could hear it.

UNIDENTIFIED FEMALE: Please come to Pinelake Nursing Home. Somebody's over here shooting. Please help me.

He's coming. He's coming.

JOHNS: Nine one one calls released today reveal the horror as a gunman walked into the Pinelake Health & Rehab Center in North Carolina and, armed with several weapons, opened fire.

UNIDENTIFIED FEMALE: Ma'am, we already got people en route. They are already on the way, ma'am.


UNIDENTIFIED FEMALE: How many people injured?

UNIDENTIFIED FEMALE: I think we got two!

JOHNS: One woman whispered as she pleaded for help.

UNIDENTIFIED FEMALE: He's inside the building. Please. He just got through shooting in the room. Please help.

JOHNS: Another described the killer.

UNIDENTIFIED MALE: What does he look like?

UNIDENTIFIED FEMALE: He is a white man with a long Shot gun.

UNIDENTIFIED MALE: White male, long Shot gun?


UNIDENTIFIED FEMALE: Hang on, ma'am, don't hang up.

UNIDENTIFIED MALE: I'm going out that window. I'm calling my mama to come get me!

JOHNS: When it was over, seven elderly residents and a nurse were dead. Three others were wounded. Among the murdered victims, a 98-year-old man.

A small town with less than 2,000 people now coping with unimaginable grief.

CHIEF CHRIS T. MCKENZIE, CARTHAGE POLICE DEPARTMENT: I don't know no other word than horrific. Everything that you can possibly imagine that is bad in this world. It's horrible. This doesn't happen, but it did.

JOHNS: Police captured the suspect, 45-year-old Robert Stewart, and are searching for a motive.

MAUREEN KRUEGER, MOORE COUNTY DISTRICT ATTORNEY: This was not a random act of violence. There's only one suspect, and he is in custody.

JOHNS: Authorities say Stewart's current wife worked at the nursing home, and they may have been separated. But they will not disclose whether she was in the building at the time of the shooting. Stewart's ex-wife was shocked, but not completely surprised.

UNIDENTIFIED FEMALE: Would you ever imagine that he would be capable of such a thing?

SUE GRIFFIN, ROBERT STEWART'S EX-WIFE: Depending on the circumstances, I think. JOHNS: He faces eight counts of first-degree murder. Other charges are pending.

John Johns, CNN, Washington.


COOPER: Unbelievable.

Well, coming up, Michelle Obama about to meet her legions of fans on the other side of the pond on her first trip to Europe as first lady. What do Europeans love about her? Let them count the ways.

First, though, Erica Hill joins us with a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, Wall Street reacting harshly to President Obama's auto ultimatum. Stocks continuing to retreat for a second straight session today, fueled by worries about the car industry and bank (ph). The Dow off 254 points, the NASDAQ off 43. The S&P 500 lost 28.

An all-in-one pill could be the next step in preventing heart attacks. It's called a poly pill. It's actually a combination of aspirin and four drugs used to lower cholesterol and blood pressure. In its first major test, the study found it worked nearly as well as all five drugs taken alone with no greater side effects. But experts say while they're encouraged, much more testing is still needed.

On NBC's "Meet the Press" yesterday, Senator John McCain, asked if he would support his former running mate, Sarah Palin, if she decides to run for president in 2012.


GREGORY: In terms of future leaders of the Republican Party, would you like to see Sarah Palin become president?

SEN. JOHN MCCAIN (R), ARIZONA: I'd like to see her compete. I think we've got some very good candidates... There's a lot of good, fresh talent out there.

GREGORY: Would you support Palin?

MCCAIN: I'd have to see who the candidates are and what the situation is at the time. But have no doubt of my respect, admiration and love for Sarah and her family.


HILL: And word today the Obamas will use their own money to redecorate the White House. Traditionally, new presidents are given $100,000 in federal money for that makeover. But they say, "No thanks."

At least one of the hand-me-downs that is staying put? The current Oval Office rug. The president says he likes it. It was designed by former first lady Laura Bush. The cost of that rug, by the way? Sixty thousand dollars.

COOPER: Well, so that is saying. All right.

Coming up next on 360, Europe's obsession with Michelle Obama. Erica Hill has that. From tea with the queen to what she'll be wearing, see how the first lady may upstage the president.

Later, why is this man running naked through the streets, holding his big pole? It is our "Shot" when 360 continues.


COOPER: As we told you earlier, President Obama leaves for Europe tomorrow. He's going to visit five nations over the course of eight days. Now, the president is going to spend most of the time meeting other leaders, a big trip. But when he steps off Air Force One, most of the attention may be on his wife.

Michelle Obama is popular here at home, but she has emerged as a superstar across the Atlantic. Newspapers will be following her every move, what she says, what she wears. A lot of people in Europe say they haven't seen this much attention since Jacqueline Kennedy.

Up close tonight, here's Erica Hill.


HILL (voice-over): In the U.K., where celebs and royals keep the presses running, Mrs. Obama is already seeing some ink of her own. Making headlines for her "Vogue" and "Oprah" covers, the organic garden she helped start at the White House, and, yes, those much documented and coveted arms.

But this international love affair isn't just about what you see on the outside.

BECKY ANDERSON, ANCHOR, BUSINESS INTERNATIONAL: People like Michelle Obama because she doesn't just talk the talk. She walks the walk, as well. She really gets involved in issues that count. And, certainly in Europe and around the world, that is what has impressed people.

HILL: Issues like education, which she has pushed since day one, most recently, with a visit to a high school in one of Washington, D.C.'s, poorest neighborhood.

MICHELLE OBAMA, FIRST LADY: I lived in a community where being smart wasn't necessarily the cool thing to be.

HILL: In London, Mrs. Obama will visit a school for underprivileged girls. She'll also venture out on her own to the Jewish quarter in Prague. Visits that could have a lasting impression not just in Europe, but also at home. CARL SFERRAZZA ANTHONY, FIRST LADY HISTORIAN: We so often look at what our first lady does in our own country. But the truth of the matter is, what they do overseas really makes them, literally, figures of world power and influence.

HILL: Of course, it's important to remember: this visit isn't about the first lady's agenda. It's about the president's.

ANTHONY: If anything, the two of them will only end up bolstering each other. Sort of like, you know, when you have Hollywood actors marrying each other. You know, it will really be a popular team. But I don't think that her popularity, as great as it is, is going to eclipse his.

HILL: The comparison to the Kennedys can't be avoided. Jacqueline Kennedy's visit as first lady in 1961 charmed the continent and Americans alike, giving her a boost in popularity back home.

While Mrs. Obama may not need much of a boost stateside, any help for the U.S. overseas will be welcomed. And you can bet, the world is watching.


HILL: One other thing that I thought was interesting, was that Carl Sferrazza Anthony said to me, is he thought the fact that Mrs. Obama is African-American has also helped to open a lot of Europeans' eyes to differences. And he thinks that it could also perhaps help to highlight some of the diversity in Europe, which isn't talked about as much.

COOPER: Right. I guess in terms of first ladies over in Europe, I guess France's first lady would be the closest in terms of sort of style icon and sort of...

HILL: Right. A lot of attention paid to what Carla Bruni Sarkozy wears. And there have been a couple of articles written about it. In fact, I've read one today where she was asked, you know, what can Michelle Obama maybe learn from her. And she said, "Whoa, whoa. You know what? I think I actually have a lot to learn from Michelle Obama," which is interesting. So...

COOPER: We'll see.

HILL: ... we shall see when the two -- the two fashionistas meet.

COOPER: Erica, thanks.

Time now for our "Beat 360" winners, our daily challenge to viewers to come up with a caption better than we can come up with for a photo that we put on the blog every day.

So let's take a look at the picture. The guard of honor, the official ceremonial welcome for Mexico's president and his wife today in London. Our staff winner tonight is Joey. His caption: "Look at the gams on Erica Hill. I didn't know she was still in town."


HILL: God love you, Joey. God love you, Joey.

COOPER: Our viewer winner. You were in Europe, on vacation.

HILL: I was.

COOPER: OK. Just explaining that.

Our viewer winner is Jason from Burlington, Massachusetts. His caption: "Hey, what do you think of the uniforms? We got a great deal on them in the Michael Jackson auction."

HILL: Fantastic.


COOPER: Congratulations. Did that auction actually take place? Have we heard? It's still maybe yet to come.

HILL: Maybe you still have a chance to snag one of those outfits there.

COOPER: Yes. I'm looking for the tube socks.

Jason, your "Beat 360" T-shirt is on the way.

So stick around for our strange "Shot of the Day." Did you see this?

HILL: Indeed.

COOPER: Did you see this guy when you were in Europe?

HILL: I didn't see him. And I'm kind of happy that I didn't. I'm not going to lie.

COOPER: Naked guy running down the streets of Paris. We'll tell you why, why he's holding a pole there. There's even a good explanation for that.

And coming up also, President Obama taking the auto industry to task. Detroit's big three CEO is told to step down. What does that mean for the car industry and what it means for you when the program continues.


COOPER: All right. Time for "The Shot" now.

Erica, we're glad to have you back from your European vacation. Now I know you said you claim not to have seen this person in Paris. I'm not sure. Hard exactly hard to miss him. A naked man running around the streets of Paris carrying a very large pole. Please, no jokes. It is a stunt, an admission for Romain Mesnil. He's a champion pole vaulter, and his Nike contract was not renewed.

HILL: I wonder why.

COOPER: So now he's looking to try to get some new endorsements. Hence, he wanted to get some publicity. This is how he tried to get noticed.

On his Web site, Mr. Naked Pole Vaulting man said he's also hoping to raise some money for a couple of charities.

HILL: That's lovely to have a good cause.


HILL: And look at the attention that he's getting.

COOPER: Yes, he's got attention.

HILL: Free advertising right here.

COOPER: They -- this is from the YouTube, which the kids are using.

HILL: The YouTube.

COOPER: They inserted the block on it.

HILL: The YouTube did?

COOPER: The YouTube. Well, I don't know. Or a mystery of naked pole-vaulting man.

HILL: Isn't it CNN that did it?

COOPER: No, no, no. This was on the Internet like this.

HILL: And it existed like that. How about that.


COOPER: That's what -- the sound effects were bad (ph). You can see all the most recent "Shots" on our Web site,

HILL: I've missed those "Shots."

COOPER: Yes. Well, going to hold most of them.

Coming up at the top of the hour, President Obama's message to Detroit: shape up or else. And his decision to essentially fire the head of GM.

Some say he's gone too far. Others say what he calls tough love should be even tougher. You can decide. We've got the facts ahead on 360.