As New York’s World Trade Center came tumbling down last week, so did business in Orange County.
Ask George Aumond, who saw the signing of a key contract delayed, fewer phone calls, less business and his clients immobilized in a harried week.
“It has been quite an impact,” said Aumond, chief executive of Santa Ana-based HSC Systems Inc. “I think we are going to see this for quite some time to come. Too many things are out of place and out of whack right now.”
Aumond’s company has three different lines of business. It makes magazines for explosives. It also makes hangers, supports and seismic bracing for pipelines. And it designs and builds storage buildings.
On Tuesday, some of Aumond’s clients were going to fly from Dallas to Salt Lake City to visit a building that Aumond’s company had designed. After the visit, they were expected to sign a quarter-million-dollar deal. But with flights cancelled, there was no visit, and no deal.
Like others, Aumond said he also saw an overall drop in business activity in the days following the attack.
“Our phones are so quiet, it’s incredible. We are getting a few orders but not real strong,” he said.
Instead of 40 to 50 phone calls a day, Aumond said, he received about 10 a day last week.
“The only phone call we got (on Tuesday) was from the Arctic Circle,” Aumond said.
Aumond employs about 30 people in Santa Ana and has annual revenue of about $2.5 million. His clients are some large companies, such as Boeing Co., and government agencies.
“All of that stuff is sold to refineries, power plants water treatment plants and all these places were shut down,” said Aumond of his products, noting that a delivery of pipe hangers was turned away by a refinery on Tuesday.
“They are opening up now,” he said, “but to get in is almost like trying to get on an airplane. They want to check the load, they want to check the driver, and they want to call and see where you came from. It is Beirut all over again.”
But how long and how severe the disruption will be is a matter of educated guesswork.
“Initially there will be a reaction in the market,” said Anil Puri, dean of the business school at California State University, Fullerton.
“The economy is already slowing down so it has come at a bad time from that point view,” he said. “The only thing that is holding the economy so far is consumer confidence.”
And, Puri said, consumer confidence, which wavered in August, could be a casualty of the terrorist attack.
In the short run, most business people and economists agree, the economy got a shock at a wrong time. It is estimated that the global aviation industry alone will lose about $10 billion in revenue, and one struggling carrier, Midway Airlines Corp., already has been pushed into suspending operations.
Yet, the long-term effect on the economy may not be as bad as some believe. There are those who think businesses here and elsewhere could spring back to normal.
“In the long-term possibly even there will be increase in the business,” Aumond said of his firm’s prospects. “We build explosive magazines (for the military), so if we stay with the war footing, the magazine business will go up.”
“There are possible events that could give a push to the economy also,” Puri said. “Defense spending very likely is going to be higher than what it would have been otherwise. And the overall government deficit will be larger than what it would have been otherwise. Both would give a boost to demand.”
Puri also said that the last big calamity,the Northridge earthquake that struck the Southland in 1994,had some positive effects on the local economy.
“In the Northridge earthquake, the negative impact was immediate,” he said. “But then, following the earthquake and all the damage it had done, there was huge amount of expenditure that took place over the next two to three years in rebuilding Los Angeles. That had a positive economic impact in that area.”
But Puri warned that it would take time before the economy gets a boost because of higher government spending and rebuilding in New York.
“The negatives will take place very quickly,” he said. n
