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American Morning

America Recovers: Interview of 'Fortune''s Andy Serwer on Post- September 11 Economy, Charity

Aired October 22, 2001 - 09:31   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.
PAULA ZAHN, CNN ANCHOR: Right now focus in on charitable contributions. Nearly $1 billion has been donated for the victims of the terrorist attacks. City officials are trying to be sure the money reaches those who really need it.

Joining us to talk about how the organizations are organizing that is CNN Financial News correspondent Hillary Lane.

Good morning, Hillary.

I'll tell you, when you think about this pool of money and the fact that so few people have seen any of it, it's a nightmare to coordinate this, isn't it?

HILLARY LANE, CNN CORRESPONDENT: It is. It's an example of swift response. They've raised more than $1 billion; it's on its way toward $2 billion at this point. So much money coming in so quickly -- because we're only talking about a matter of weeks.

And let me give you a little bit of breakdown where the money has gone. The Red Cross is getting the most, by far, $452 million. The United Way September 11 fund has raised $170 million. Corporations are giving a lot of money. A lot of on-line giving.

But there are definite channels. Let me give you an example of how the money would make its way from the givers to the recipients. The Concert for New York City, at Madison Square Garden, will raise about $20 million -- expected -- and then the other two that are taking place over the weekend -- so three of them together.

ZAHN: This includes pledges.

LANE: That includes pledges as well, yes.

ZAHN: Which you're never 100 percent certain you are going to get.

LANE: At this point, which is why you can't give an absolute estimate so closely after.

But that money from the New York City concert is going to be channeled through a group called the Robin Hood Foundation. It's an extremely reputable organization; John F. Kennedy Jr. sat on its board. Bob Pittman, a senior executive with AOL Time Warner, currently sits on the board. That group focuses on lower-income families. So they will take that money and channel it through. The Red Cross is doing the same thing. The United Way as well, but not just to families, also to relief efforts in different parts of the process.

One of the issues is it takes time, and the families have to ask for the money. And I think that is why you begin to see a little bit of confusion. Families are expecting to be contacted in a lot of cases, and these organizations are saying we wish we could contact everybody, but there are so many people; that's why you need to come to us.

ZAHN: And it's interesting because we had the head of the Red Cross on last week, Dr. Bernadine Healy, who said, in many cases people are aware the money is sitting there; they don't want to ask for it, period. So she was running these full page ads in newspapers across the country, reminding people that they have these hundreds of millions of dollars sitting there, and if you went through the right process, you might get a small portion of that.

LANE: That's exactly true. When I was down at Pier 94, there were a couple of channels that you could go through there. One is called Safe Harbor; they would give you a check on the spot, not just for the families, but if you lost your job. And that was just before October 1, so you had rent payments due, credit card payments due, and people who had lost their income all of a sudden were really strapped. Across the street was the Red Cross service center. If you went in there, you could get a check on the spot, or if you don't qualify for the kind of assistance they were providing there, they would refer you to FEMA or to a group that would handle housing payments.

So there is absolutely money, but they do have to go out and ask for it. One example of how long this takes -- it's incredible -- is the Oklahoma City Bombing Center, where the Red Cross set up more than five years ago. They are just beginning to wrap up work on this at this point, and they're estimating it's going to be at least 10 years to handle all of the long-term effects here in New York City. So while the donations may slow, the needs actually may grow over time. And that just tells you how, even though there's $1 billion in hand, it will be distributed over a period of time.

ZAHN: It's interesting to see how individual victims have used their story and obviously used the media to tell the story. There was a horrible story about young women who was widowed. Her 31-year-old husband trader had lost his life, and she was sitting there with house payments, car payment, and went public to one of the newspapers here, and as a result, the Red Cross hooked up with her, and now she has some $200,000 that she desperately needs to take care of her family.

LANE: But she is just one of thousands and thousands of people in a situation like that. So I think while they want to contact everybody, they are saying please don't be shy to ask for what you need.

ZAHN: It's good to see you in person for a change. Usually we see you on some remote location out there.

(COMMERCIAL BREAK)

ZAHN: We are back, at 37 minutes after the hour; you know what that means -- if you've been watching your clock, the New York stock exchanges are open, and here to talk the openings and to talk about the economy is Andy Serwer of "Fortune" magazine.

How are you?

ANDY SERWER, "FORTUNE": Fine, Paula. How are you doing?

We can see some weakness in trading this morning -- not a surprise. Not a whole lot of good news out there this morning, some weak earnings reports and some layoffs I should tell you about.

SBC, the regional telco giant, based in San Antonio, Texas, announced thousands of layoffs.

Lexmark, the computer printer maker announced 1,600 job cut.

And there's weakness at 3M and Conoco as well.

ZAHN: Based on how individual stocks did last week, are there any companies we should be focussing in on today to give us a sense of how the market might do this week?

SERWER: I think you have to look at those stocks: 3M, SBC, Conoco, Lexmark.

Emerson Electric also announced this morning.

American Express, a Dow component and big financial company, reporting later on today.

In total 1,650 companies will be announcing earnings this week, so it's a big earnings week.

ZAHN: Do we have a preview of what those numbers might indicate?

SERWER: I think they are going to be down. Companies have warned previously that the numbers are going to be down, so we shouldn't get any big surprises. That's been the story this earnings season, that companies have already told us they are going to be weak, so don't expect too much out of us. And in fact, they haven't been delivering too much. So that's the theme we are going to look for this week.

ZAHN: Some quick thoughts on some of President Bush's comments over the weekend in China about the global economy, global business?

SERWER: Absolutely. He said, for the first time -- and a lot of business leaders have been suggesting this -- that the terrorist, in fact, one of their goals was attacking the global economy itself -- and this is an interesting point -- if you think back on the World Trade Organization meetings in Seattle and Bologna recently, a lot of demonstrators protesting against globalization, and business CEOs that I was talking to were saying, Be careful of what you wish for, demonstrators, because you may get it. This is, in a sense, an attack on the global markets, and you can see what we get -- is war and people pulling out and not doing business overseas.

We do have a WTO meeting in Qatar, of all places, next month. So that should be very interesting. That's an oil-rich country next to Saudi Arabia. One hundred and forty one countries are expected to attend. They are still looking to do this thing, and Qatar is spending $30 million on the meeting -- but obviously, it's a very fragile time to hold that kind of thing.

ZAHN: See you tomorrow -- same time same place.

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