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RESPONSE TO TERROR | A CHANGED AMERICA

The Bottom Line: Forget Business as Usual

Commerce: Sept. 11 changed the way companies operate, in everything from shipping goods to protecting employees.

January 13, 2002|MICHAEL A. HILTZIK | TIMES STAFF WRITER

Although he was 3,000 miles from ground zero on Sept. 11, Roland Furtado has felt the effects keenly.

As the owner of a Los Angeles airfreight service, Furtado makes his living placing cargo in the bellies of passenger jets. Even before the attacks, his business was off more than 20% for the year.

The terrorist strikes dealt the economy a further blow. For Furtado and many others, they also altered the business landscape in fundamental ways. In early October, for instance, the Federal Aviation Administration dramatically tightened rules on airfreight. Among other restrictions, freight forwarders were permitted to place a package on a passenger flight only if the sender was a long-term customer or one whose premises they had personally inspected.

The requirement forced Furtado's small operation, Roland International Freight Services, to turn away business by the crate load.

"Lately, we've said no to so many shipments because we can't visit the customer," said Furtado, an India-born U.S. citizen. "I had a young kid from France who wanted to ship a stereo set, books and clothes to Europe. I had his passport, his green card, his driver's license. But we couldn't handle it."

Furtado's plight is one of numerous echoes of Sept. 11 resounding across the business world. Although the repercussions for some high-profile industries have been widely publicized--airlines and cruise lines threatened with bankruptcy, vacation resorts begging for customers--the broader effects on U.S. industry run deeper and may last longer.

Protecting employees, buildings and data has become a paramount concern and a significant expense. Importing goods and supplies from overseas is more complex, more costly and more prone to delay.

On the labor front, the attacks have raised unexpected questions: Should fear of flying qualify as a disability protected by the Americans With Disabilities Act? Are businesses violating federal law by opening employee mail in search of anthrax spores?

Perhaps the most important change is the increasing intrusiveness of government in the relationship between some businesses and their customers. This is particularly evident in financial services.

Federal laws enacted within weeks of the attacks will require banks and other financial institutions to secretly scrutinize more private transactions and report to government agencies any activities that appear even faintly unorthodox--often without informing their customers.

Other industries may find the government less involved in their affairs--to their regret. Textile and pharmaceutical makers that have relied on the U.S. government's big stick to advance their interests overseas will have to adjust to a new foreign policy.

Post-Sept. 11, the U.S. is defining its friends and enemies less by how closely their economic and trade systems resemble ours and more by their eagerness to embrace America's anti-terrorism doctrine. Agencies that promoted U.S. corporate interests abroad will be otherwise engaged.

"The Treasury and Commerce departments will focus on monitoring and surveillance of finance and trade with terrorist networks," Jeffrey E. Garten, dean of the Yale School of Management and a former Commerce Department official, said shortly after the attacks. "It is hard to believe that these and other agencies will have the time and energy to pursue normal commercial goals."

This shift in priorities was brought home to pharmaceutical companies after October's anthrax scare. As cases of exposure proliferated, the U.S. government threatened to break Bayer's patent on the anthrax remedy Ciprofloxacin to ensure an adequate supply. This was a sharp departure for Washington, which long had supported the U.S. drug industry in its insistence that developing countries honor patents on AIDS drugs.

Garten and others also say U.S. companies will have to be more attentive to opposition to globalization in the underdeveloped world, where it often is seen as a force oppressing unskilled laborers.

"The love of American values and hate of American power are found among the same people because most workers don't see American politics. They see American companies," said S. Prakash Sethi, a business professor at the City University of New York and chairman of an independent committee that oversees working conditions at foreign plants for Mattel Corp.

"We give them a picture of American values, but what they see is an almost total indifference to workers," he said. "The practices of foreign multinationals in these countries where workers are really suffering make them breeding grounds for future terrorists."

A Preoccupation With Security

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