The September 11th attack
Hawai'i firms faltering
By Karen Blakeman
Advertiser Staff Writer
Tax deferrals, $99 travel packages and Japan-oriented telethons were among the measures considered yesterday to help Hawai'i's small businesses survive the economic fallout of the Sept. 11 terrorist attacks on New York and Washington.
Business owners told Gov. Ben Cayetano they will go under without immediate help and asked that the state work with them to implement effective measures.
"There were a lot of good ideas presented, and I was pleasantly surprised at the number of things I hadn't thought of myself," Cayetano said yesterday after meeting for more than two hours with 60 small-business leaders at the state capital.
Businesses with fewer than 50 employees make up 95 percent of the businesses in Hawai'i, and they are in dire need of innovative assistance to stay afloat, according to the business people who attended the meeting yesterday.
"Most have only 30 to 60 days before they go under," said Craig Watase, vice president of Mark Development and president-elect of the Building Industry Association.
"There just isn't a way to put a positive spin on this," said Patrick McCain, president of the Hawaii Restaurant Association.
"We need short-term, Band-Aid fixes and we need them quick," said Randy Lau, president of Designer Built Systems, Inc.
Lau said most of those Band-Aids must be affixed to the tourism industry, which will take other businesses down with it when its employees face layoffs or reductions in hours.
Cayetano said some of the suggestions made during the meeting were very creative.
One suggestion to lure Japanese visitors back to Hawai'i involved a telethon similar to Friday night's widely watched broadcast of "America: A Show of Unity," but with a Japanese flair and aimed at audiences in Japan, he said.
Seiji F. Naya, a state economist, said during the past few days air traffic from the Mainland has bounced up to 70 percent of last year's rate, but traffic from Japan is at only 55 percent.
Ron Martin, an author and president of Success Dynamics, said he suggested challenging the airlines, boosted by state or federal subsidies, to offer $99 travel packages to Hawai'i. Businesses could sweeten the deal with gifts and money-off coupons.
"I guarantee people would get on those airplanes," Martin said. "Their knees might be knocking, but they would get on."
Some ideas were more basic. One example: Defer taxes paid by buses and other ground transportation businesses on profits made last year, because profits in that industry are down 30 to 40 percent.
Cayetano said he has already talked to bank officials about business requests for emergency loans and for loan deferrals, and is confident bank leaders are willing to help.
"Part of that is bank policy: flexibility in unforeseen situations," he said "Only this unforeseen situation goes further than most."
Cayetano said some economic indicators of the past few days seemed more hopeful than those in the days immediately after the terrorist attacks. For instance, only seven contestants, he said, have dropped out of the Ironman Triathlon.
But the nation's plan for a war against terrorism is bound to affect the world economy, and Hawai'i is unlikely to escape that eventuality, he said. Steps must be taken.
"As governor, I need to look at what is important," he said.
Cayetano said things that seemed important before Sept. 11 don't necessarily feel that way now.
"Sometimes you just get jaded," he said. "Something like this brings you back. I just hope it also brings back the ladies and gentlemen in the Legislature."
Cayetano said he plans to bring some of the suggestions made by the business leaders to lawmakers.
Victor Lim, a McDonald's franchise owner and chairman of the Hawaii Restaurant Association, said after the meeting that he was pleased Cayetano had called business people together to discuss the economic downturn and its consequences for business.
"Government, business — we're all in this together," Lim said.
