Ford Announces Pressure on Your Wallet Hitting Production Lines; Big Oil Back on Hot Seat
FREDRICKA WHITFIELD, CNN ANCHOR: Ford announcing the pressure on your wallet is hitting its production lines. Ali Velshi tracking issue number one from New York. And this is not good when we hear Ford Motor Company with the kind of history that Ford has in this country.</s>ALI VELSHI, CNN, SENIOR BUSINESS CORRESPONDENT: Yes.</s>WHITFIELD: It really does kind of symbolize, you know, the American economy. It symbolizes so much.</s>VELSHI: It's our industry. It's our lifestyle. That's definitely exactly right.</s>WHITFIELD: Yes. It really is.</s>VELSHI: ... But so does this by the way, this barrel of oil and that's the price that it hit overnight, $135.09. $135, that's an increase in $5 over a 24-hour period. That's pretty remarkable. Now what Ford is saying and they're very clear about this. They are cutting production for the remainder of the year, about 15 percent of their production because customers have said that they don't want to buy the same kind of big cars, the same kind of fuel consuming cars.</s>WHITFIELD: Yes.</s>VELSHI: So, they're saying that they need to re-tool a little bit and they need to build more fuel efficient cars so this is exactly what we've thinking will happen when we keep having these record gas prices. $3.83 a gallon now, you know, for self serve unleaded. So, it's entirely connected. You see the airlines increasing fees because of fuel and now people are saying they're buying smaller cars. So, it's absolutely connected but what is happening here is that the high price of gasoline is changing the driving and lifestyle habits of Americans.</s>WHITFIELD: Right. And if Ford now, who next?</s>VELSHI: Well, they're all in trouble when we saw the numbers come out for sales, truck sales in April, it fell off a cliff compared to last year. People are buying more fuel efficient cars so there is one good - the piece of good news in here is the automakers can read the tea leaves and say let's start making a lot more in the way of fuel-efficient smaller vehicles.</s>WHITFIELD: Wow. But that's kind of like in the long term still. It's going to take time to draw up those plans, get it going, get production. I mean, it almost sounds like a couple of years down the line before we are talking about an abundance of the hybrid vehicle.</s>VELSHI: I think you're absolutely right. But the point is that's what's going to have to happen. Here is the thing. When we start to see a break in oil price, if we, I have no reason to believe we would, but if we did we do see consumer habits changing in America. People say you know what maybe I will hang on to my gas guzzler for a little while. It's only going to be if we see these prices sustain for a while. People won't buy trucks. And as Tony pointed out earlier, they won't be able to sell theirs.</s>WHITFIELD: I think we are already there, too. They cannot sell and even if they want to get the few hybrids that are on the market.</s>VELSHI: Yes.</s>WHITFIELD: Ali Velshi, thanks so much.</s>TONY HARRIS, CNN ANCHOR: So Big Oil back on the hot seat today. Executives again defending record profits while you - while we pay record prices. CNN's Kate Bolduan on Capitol Hill.</s>KATE BOLDUAN, CNN CORRESPONDENT (voice-over): More than $130 a barrel of oil. An average $3.80 for a gallon of gas. And the five executives of major oil companies summoned to Capitol Hill to answer for the record prices.</s>SEN. PATRICK LEAHY (D), JUDICIARY CHAIRMAN: $36 billion in three months. Certainly, more than the gross domestic product of some countries.</s>SEN. DIANE FEINSTEIN (D), CALIFORNIA: You rack up record profits for any corporation in the United States of America, quarter after quarter after quarter. And apparently have no ethical compass about the price of gasoline.</s>SEN. RICHARD DURBIN (D), ILLINOIS: Is there anybody here that has any concerns about what you are doing to this country?</s>J. STEPHEN SIMON, SENIOR V.P., EXXON MOBIL: We have a lot of concern about that. And we're doing all that we can to produce as much product as we can to put downward pressure on prices.</s>BOLDUAN: While Stephen Simon of Exxon Mobil acknowledged the big profits he said the company isn't driving up the high price of gas, it is the raw material, crude oil that's forcing up the price.</s>SIMON: There are so many factors that go in to establishing that price, supply and demand, weakness of the dollar, GOP, political situation, the amount of speculation coming into the market, the amount of spare capacity.</s>BOLDUAN: The executives also point out they are plowing virtually all of their earnings into finding new U.S. energy supplies.</s>ROBERT MALONE, CHAIRMAN, BP AMERICA: Our investments across the entire energy spectrum are huge. The hard truth is even with major improvements in energy efficiency, the United States is going to need more oil, more coal, and more natural gas, and more nuclear in 2030 than it does today.</s>HARRIS: And Kate Bolduan joins us from Capitol Hill. You know, there is a part of me, albeit a small part that feels a bit for these oil executives. I mean, we have to keep in mind, as we register all of this outrage, with pricing, this is still a business. I'm just wondering, Kate, what are we expecting to hear from these executives this morning?</s>BOLDUAN: It is a business. And I think that's something that definitely came out in the hearing yesterday, Tony. And we can expect to hear a little bit more today because the same five executives are going to be back on Capitol Hill but this time on the House side, on the House judiciary committee. Those executives, BP, Chevron, Phillips, Shell, and Exxon Mobil, they're going to be again, I mean, we're not reaching what you can say the hot seat. Because they are really hitting them with some hard questions. I mean, we can expect similar topics. Of course, we are talking about gas prices. And the congressmen are going to be asking them, you know, what are you doing to help this price of gas? And why is the price of gas so high? And we are also going to be looking is there any fault on the part of these oil companies when it comes to this gas price. But if you listened from the hearing yesterday, these oil executives, they say look, this price of crude, raw crude oil, this price, they say, is out of their hands. And that's what is at the center of driving up the price. So we can expect to hear possibly more fireworks today. Tony.</s>HARRIS: And it's out of my hands does not feel like an acceptable answer but I am curious to know more --</s>BOLDUAN: You can say that from the response of the congressman yesterday.</s>HARRIS: OK. Kate Bolduan for us on Capitol Hill. And as always, let me remind you to keep watching CNN, our money team, led by Ali Velshi. He has you covered on all of these issues affecting your wallet. Join us for a special report. It's called "Issue #1, the economy" today, noon Eastern, only on</s>CNN. WHITFIELD: All right. More now on that news just in from the presidential race. CNN confirms that Democrat Barack Obama has begun the search for a running mate. The veteran Democratic activist says that Obama has chosen the head of the search team of his search team, that is, former Fannie Mae CEO, Jim Johnson. Johnson will begin screening potential VP candidates. That news from the Barack Obama campaign. Meantime, guess who is coming to dinner this weekend. John McCain's guest list for a weekend cookout includes rumored running mate candidate Florida Governor Charlie Crist, Louisiana Governor Bobby Jindal and former Massachusetts Governor and presidential candidate Mitt Romney. The McCain camp says it is just a social gathering, by the way. In the meantime, Democratic Hillary Clinton still in the fight. She is in Washington today after campaigning in Florida. She's still pushing to have votes from the Florida and Michigan primaries counted. And find out more on the candidates at cnnpolitics.com. Cnnpolitics.com is your source for everything political.</s>HARRIS: Staggering numbers in China. The death toll from last week's earthquake jumped by nearly 10,000 in a single day. Here is what we know. The government now says 51,151 people are confirmed dead. Almost 30,000 others are missing. The government is pleading for tents. Millions are homeless or their homes are unstable or unsafe. One sign of things getting back to normal. The Olympic torch relay resumed in China. It was on hold during three days of official mourning. The run is still being delayed in the Sichuan province where the quake hit.</s>WHITFIELD: And a message from Myanmar from U.N. Secretary General Ban Ki-Moon. He's visiting the nation weeks after a cyclone left more than 130,000 dead or missing. Ban told the Prime Minister the disaster is more than Myanmar can handle and the country needs more international help. Ban flew into the disaster zone, the remote Irrawaddy Delta. U.N. relief experts say millions of people are in desperate need of aid and many have not received any help at all. And of course, you can help at cnn.com. We have a special page on the devastation in China, and Myanmar. Plus, links to aid agencies that are organizing help for the region. It's a chance for you to impact your world.</s>HARRIS: Planning a summer getaway but finding it hard to get away from travel fees. We have a few alternate routes.