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S.E. Wood No bail out Many years ago, I worked for a New York-based
manufacturing firm. We learned that one of our company officials
was stealing us blind. He would duplicate orders of inventory
and have the surplus shipped to his own warehouse for subsequent
resale. He would declare items to be surplus, write
them off the books, sell them and keep the money. All kinds of
stuff like that. Private detectives caught him red-handed, and
he was terminated. Of course, all our company executives were
bonded, so the company was protected by the insurance carrier
against such thievery. I bring all this up to illustrate what I believe
is happening right now with the plea of the airline industry
for a government bail-out following the Sept. 11 terrorist incident.
Now, don't get me wrong. The terrorist attack
was horrible. American Airlines and United Airlines lost expensive
airplanes, and they now have huge legal exposure for crew and
passenger loss of life. In addition, the government shut them
down for days. This idleness, no doubt, created a hardship. But
if, after a decade of unprecedented prosperity and growth, the
airline industry couldn't park their planes for six days without
going broke, then something has been terribly wrong in the way
they have managed their business. So let's face it, the airline industry was
in deep financial trouble before the Sept. 11 incident. Midway
Airlines had just declared bankruptcy and discontinued operations
the week before. TWA would have gone under last year had it not
been purchased by American Airlines. Northwest has been on the
brink of financial disaster for decades. Most of their troubles
were of their own making. Just ask anyone who has flown lately.
Sure, there was a big loss in the cost of
the four planes and significant financial exposure to the families
who lost loved ones on the doomed flights. But that's what insurance
is for. And the cost of insurance is a major reason plane tickets
are so expensive. Airlines are also complaining that passenger
loads are down because passengers fear another terrorist hijacking.
Not true. Most of today's air passengers are business travelers,
not tourists on vacation. They fly because they have to. And
if the planes are flying, most companies would expect their traveling
employees to be on them. No. The reduction in passenger load
simply reflects the current economic condition that has caused
companies to scale back on their business itineraries. Happens
every time. But in addition to American and United who
suffered direct losses, Delta and Continental and U.S. Air and
Northwest and all the rest are also lining up before Congress
with their hands out. Sadly, they are exploiting the recent tragedy
as an excuse to demand that taxpayers cover their operating inefficiencies.
And as I write this, the Senate has already approved their $15
billion bail-out, and the House is expected to do likewise. So where does it stop? How about the insurance
companies? They are the ones carrying the real financial burden.
Don't they need a government handout? And the air freight and
overnight carriers? UPS,and Memphis-based Federal Express? They
were down for days too, weren't they? And how about the airport
hotels, motels and convention centers? Even the Las Vegas casinos
are complaining. That's the problem. Free money, whether it
is comes from an employee bonding company or from taxpayers via
the federal government, provides a temptation for poor management
to cover their backsides at someone else's expense. To paraphrase former Clinton aide James Carvell's
"trailer-park" statement, "It's amazing what you
can turn up if you drag a $15 billion dollar-bill through Congress."
P.S. Just a couple of thoughts: If violence
is so contrary to Muslim beliefs, why has there been no Islamic
condemnation of Osama bin Laden? Why haven't we heard from American
Muslim leader, Minister Louis Farrakhan? And just where is the
spiritual leader who never misses a photo opportunity, the Rev.
Jesse Jackson? · · · |