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CNN Live Saturday
U.S./Canadian Task Force Work To Prevent Future Outages
Aired August 16, 2003 - 16:03 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KRISTI PAUL, CNN ANCHOR: A White House spokesman says a U.S./Canadian task force will act as quickly as possible to find ways to prevent future outages. President Bush and Canadian Prime Minister Jean Chretien spoke by phone yesterday to discuss the situation. For a while, U.S. and Canadian officials had engaged in finger pointing over just where that outage began.
What effect, if any though, will the blackout have on the U.S. economy. Let's ask CNN financial correspondent Kathleen Hayes. She joins us live from New York as well. Hello Kathleen.
KATHLEEN HAYES, CNN FINIANCIAL CORRESPONDENT: Hi there, Kristi. The good news is economists say don't worry too much. This will be a short term blip on the radar screen. Think of the impact of a blizzard when it blakets a large part of the country. You have things shut down for a couple of days, the snow melts, you get back to business. Well, our lights are back on, a lot of stores are out there again. But this blip on the radar screen, some people are estimating it will cost the economy about $5 billion. Now this is a yearly $10 trillion economy. But $5 billion is nothing to sneeze at. It's clear that retailers are probably the ones who are getting hit the hardest, from the mom and pop delies that had to throw food out, to the restaurants that had to close, to the movie theaters that sat dark, that's where you will see the biggest impact.
We spoke to Starbucks today. They said of their 5,000 stores across U.S. and Canada, about 600 were affected. Some today still not operating at 100 percent capacity. But in the end, they do think that they are going to say that this was not a hugely significant impact.
Beyond the retailers. We also could look at someone like UPS. Now, they told us that they have people working overtime this weekend to work down the backlogs. Auto manufacturers are also being impacted by this. As of Friday, about one-third of the 150 of the big three plants in the midwest were shut down. They weren't sure how long it would take them to get up and running over the weekend.
So, they're also having am in pact. Which, by the way, is one of the sectors that's been really hardest hit the past three years. They don't need anything to slow them down. Also, airlines, estimates of about 25 to $30 million in loses for the airlines. Again, they are in such bad shape in many cases with billions of dollars of debt, that maybe 25 to $50 million dollars doesn't sound too bad but again this is an industry that can't take any added burden.
There are some silver linings though. Even with the auto manufacturers being shut down and not being able to produce some cars, they have excess inventories right now, so maybe that's a silver lining for them. You can also think of restaurants and stores having to go out and order food that was lost, so those food wholesalers are going to have a bit of a boost.
You can think of fact that people on Friday didn't go back to work, found themselves with time on their hands, found a store open, found a mall where on the upper west side of Manhattan, where I live. There were a lot of people shopping. People in restaurants because the power was back on. So those retailers will see a benefit.
Even if you look at the cost to a city like New York, I think the estimate is in the millions of dollars of good chunk of that in overtime, that's a cost to the city, but when people get their checks and go out and put their money in the bank, maybe they will say, hey, I have a little extra money. Maybe they will spend. So to a certain extent people figure this may be recouped.
Apparently also the Internal Revenue Service is giving folks who didn't make their August 15 deadline for meeting their extensions from April 15 have been given maybe another week. If you just write northeast blackout across the top of your return, apparently they'll give you a little extra wiggle room.
So again, there are a lot of silver linings, maybe the biggest of all, with an incredible hit, 60 million people, that's about a fifth of our population, affected by this blackout, economists can look at it and say, don't worry, don't sweat it. The bottom line though, economist say, people on Wall Street say, if we don't fix this problem, then we could have bigger problems down the road. You can't have the lights out, you can't have to power not on and keep the economy going.
You know taking a hit like this every 10 or 20 years, maybe, isn't so bad. But, some industry experts say Americans are using more and more energy all the time. So, maybe we shouldn't look at this as a blip when it comes to the economy itself in its fundamental aspect. And Wall Street certainly hoping something gets done soon -- Kristi.
PAUL: Maybe it will inspire people to be a bit more conservative with the electricity they're using as well. All right, thank you very much Kathleen.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired August 16, 2003 - 16:03 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KRISTI PAUL, CNN ANCHOR: A White House spokesman says a U.S./Canadian task force will act as quickly as possible to find ways to prevent future outages. President Bush and Canadian Prime Minister Jean Chretien spoke by phone yesterday to discuss the situation. For a while, U.S. and Canadian officials had engaged in finger pointing over just where that outage began.
What effect, if any though, will the blackout have on the U.S. economy. Let's ask CNN financial correspondent Kathleen Hayes. She joins us live from New York as well. Hello Kathleen.
KATHLEEN HAYES, CNN FINIANCIAL CORRESPONDENT: Hi there, Kristi. The good news is economists say don't worry too much. This will be a short term blip on the radar screen. Think of the impact of a blizzard when it blakets a large part of the country. You have things shut down for a couple of days, the snow melts, you get back to business. Well, our lights are back on, a lot of stores are out there again. But this blip on the radar screen, some people are estimating it will cost the economy about $5 billion. Now this is a yearly $10 trillion economy. But $5 billion is nothing to sneeze at. It's clear that retailers are probably the ones who are getting hit the hardest, from the mom and pop delies that had to throw food out, to the restaurants that had to close, to the movie theaters that sat dark, that's where you will see the biggest impact.
We spoke to Starbucks today. They said of their 5,000 stores across U.S. and Canada, about 600 were affected. Some today still not operating at 100 percent capacity. But in the end, they do think that they are going to say that this was not a hugely significant impact.
Beyond the retailers. We also could look at someone like UPS. Now, they told us that they have people working overtime this weekend to work down the backlogs. Auto manufacturers are also being impacted by this. As of Friday, about one-third of the 150 of the big three plants in the midwest were shut down. They weren't sure how long it would take them to get up and running over the weekend.
So, they're also having am in pact. Which, by the way, is one of the sectors that's been really hardest hit the past three years. They don't need anything to slow them down. Also, airlines, estimates of about 25 to $30 million in loses for the airlines. Again, they are in such bad shape in many cases with billions of dollars of debt, that maybe 25 to $50 million dollars doesn't sound too bad but again this is an industry that can't take any added burden.
There are some silver linings though. Even with the auto manufacturers being shut down and not being able to produce some cars, they have excess inventories right now, so maybe that's a silver lining for them. You can also think of restaurants and stores having to go out and order food that was lost, so those food wholesalers are going to have a bit of a boost.
You can think of fact that people on Friday didn't go back to work, found themselves with time on their hands, found a store open, found a mall where on the upper west side of Manhattan, where I live. There were a lot of people shopping. People in restaurants because the power was back on. So those retailers will see a benefit.
Even if you look at the cost to a city like New York, I think the estimate is in the millions of dollars of good chunk of that in overtime, that's a cost to the city, but when people get their checks and go out and put their money in the bank, maybe they will say, hey, I have a little extra money. Maybe they will spend. So to a certain extent people figure this may be recouped.
Apparently also the Internal Revenue Service is giving folks who didn't make their August 15 deadline for meeting their extensions from April 15 have been given maybe another week. If you just write northeast blackout across the top of your return, apparently they'll give you a little extra wiggle room.
So again, there are a lot of silver linings, maybe the biggest of all, with an incredible hit, 60 million people, that's about a fifth of our population, affected by this blackout, economists can look at it and say, don't worry, don't sweat it. The bottom line though, economist say, people on Wall Street say, if we don't fix this problem, then we could have bigger problems down the road. You can't have the lights out, you can't have to power not on and keep the economy going.
You know taking a hit like this every 10 or 20 years, maybe, isn't so bad. But, some industry experts say Americans are using more and more energy all the time. So, maybe we shouldn't look at this as a blip when it comes to the economy itself in its fundamental aspect. And Wall Street certainly hoping something gets done soon -- Kristi.
PAUL: Maybe it will inspire people to be a bit more conservative with the electricity they're using as well. All right, thank you very much Kathleen.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
