California fires disrupt business patterns

By Michelle Kessler
USA Today

Business disruptions continued in fire-struck Southern California yesterday amid delayed shipments, company closures and travel glitches.

Gov. Gray Davis has said the cost to battle and clean up after the fires could hit $2 billion. But while that's a blow to a cash-strapped state reeling from the economic slowdown, it's unlikely to have a lasting impact, economists say.

When compared with the $700 billion Southern California economy, "$2 billion is tiny," says University of California, San Diego, economics professor Richard Carson.

The region's economy is larger than every state except New York and Texas.

"Disasters are not recession-causing events," says economist Christopher Thornberg of the University of California, Los Angeles. "They disturb business patterns in the short run ... but economies get back up on track." Still, short-term damages continued to batter businesses. Among them:

Transportation problems. Crucial railroad shipping lines, used to cart cargo from California ports to points east, have been closed off-and-on since Sunday, delaying more than 100 trains. But companies such as Ford, Target and Wal-Mart say the delays have not yet had an effect on supply chains.

Limited flight delays from San Diego International Airport continued yesterday, affecting some Federal Express planes. But FedEx says most packages nationwide are not yet being affected.

Railroad and road closures since Sunday also continued to hamper UPS. It was not delivering or picking up packages in some fire-ravaged areas near Los Angeles and San Diego.

Lost work. San Diego headhunting firm Shelton & Parker will be closed all week so that workers can help friends and family. But that will cause a crunch as the firm opens its first European office later in the month, President Frederick Shelton says.

San Diego companies that were open yesterday said staffs were light and productivity was low.

At San Diego engineering firm Science Applications International Corporation, "all of us are preoccupied," says spokesman Ron Zollars. Staffers were collecting donations, watching news updates and checking emergency Web sites, he says.

Nearby government contractor Titan had some employees with asthma stay home because of the smoke.

"Your nose is burning, your eyes are sore," says Vice President Ralph Williams.

Several workers at PC maker Gateway, Burlington Northern Santa Fe and Jack in the Box lost their homes, keeping them out of the office. Wal-Mart had 21 area workers lose their homes.

Business disruptions. Some Jack in the Box fast-food restaurants in San Diego were running out of buns and other supplies. Some bakeries that make the buns weren't open, and shipping delays contributed to the shortages, spokesman Brian Luscomb says.

Wells Fargo was bringing in locksmiths to help customers who had lost their homes — and their safe deposit box keys — open the boxes.