Sinking of the Titanic example of leadership that failed

"We have struck iceberg ... sinking fast ... come to our assistance."Burning the airwaves came those words late in the cold evening of 1912. Before they tapped the last bit of Morse code, those words became the epitaph for the lives of the 1,200 people lost on the Titanic. The ship was doomed and it was slowly sliding into its watery grave.Why did the largest, most advanced ship of the century sink?Those of us who studied the Titanic, or at least saw the movie, may know why. It wasn’t the iceberg causing the disaster. It was something else. Clear in my mind was the real cause: Leadership had failed.The Titanic still rests on the bottom of the ocean, but we can resurrect the truth. The lessons we learn can help our businesses stay on course and improve our ability to lead others.Leadership is always responsibleLeadership is more than a wooden figurehead. Leadership is not a position, a job title or in this case, merely the captain of the ship. Leadership is not just power, ego and self-centered pride. Leadership is both science and art. Leadership is ever present, touching, motivating, talking, and checking, removing barriers, training, preparing, breathing and heading toward in particular direction.Management is a 8-to-5 obligation; leadership is a 24-hour-a-day responsibility.This was Captain E.J. Smith’s retirement trip. He was headed for the easy life. All he had to do was get to New York. No one knows why he ignored the facts, or why he ignored seven iceberg warnings from his crew and other ships. Responsibility can’t be delegated. Leadership is responsible for everything the organization does or fails to do. In a disaster, the captain goes down with the ship.The biggest is not the bestThe larger an organization becomes, the greater its inflexibility, and the more difficult and cumbersome it is to steer, to direct and to change. It soon becomes a bureaucracy where rules, regulations, policies, procedures and "I need permission to make a decision" becomes the norm. Today’s businesses must adjust course quickly. It took more than 30 seconds before the Titanic turned away from the iceberg, but then it was too late.Rank has its privilegesRanking is good for command and control, not good for change and innovation. Ranking people limits potential. Today, businesses rank and classify people, sometimes unintentionally. However, the results are the same.Examples are blue collar, white collar, temporary, part-time, those with cubicles, those with desks, and those with reserved parking spaces. Ask yourself, when the ship sinks, who gets in the lifeboats first? Who gets severance pay, bonus, stock options or nice hotels? Clear the lines between the classes and make everyone feel they are rowing in the same direction for the same purpose. Make people feel like equals.The truth changesThe Titanic was unsinkable, or so they thought. So confident were they, that they only had enough lifeboats for half the passengers. The thinking that made us successful yesterday is the very same thinking that will cause us to fail tomorrow. Our unlearning curve must be greater than our learning curve.Technology is never a substitute for leadershipSomeone once said, "The danger is not that computers will replace us. The real danger is when we start acting like computers." When technology fails, leadership must prevail. Capt. E.J. Smith said years before the Titanic’s voyage, "I cannot imagine any condition which would cause a ship to founder. Modern shipbuilding has gone beyond that."Many businesses today have replaced their leaders with technicians, their brains with a hard drive. So when disaster strikes, who is going to lead and will your technology pull you under?Leadership is always trainingAs the stern of the Titanic lifted out of the water, the crew and passengers struggled with the lifeboats. There were no drills, no rehearsals and the crews stood unfamiliar with their responsibilities. The boats were improperly loaded and only one boat went back to try to recover survivors. Everyone is business today must be a trainer and mentor, not just the training department.Leadership looks below the surfaceThe greatest danger as well as the greatest opportunities lie below. The ocean in 1912 was like glass, deceptively dangerous. The biggest part of an iceberg lies below, unseen. Like steel fangs, it tore at the rivets along 300 feet of the Titanic’s hull. Those below, the "crew and steerage," felt and saw the damage first. Like a gasping breath, the steam billowed above as chaos reigned below.Just like then and now, those who know what’s wrong with your "ship" are those below. Furthermore, those below usually have the best ideas and solutions to your problems. Start looking toward those on the front-line for the ideas, problems and solutions. Do it before you hit the icebergs.Leadership looks beyond the horizonSuccess gets organizations in trouble. A good "captain" is on the lookout for changing trends, changing needs, storms and icebergs. Sam Walton identified the need and Sears didn’t. Apple Computer saw the need before IBM. The vision of the Sony Walkman existed in Akio Morita’s mind before RCA. Mary Kay Ashe saw it and others didn’t. Get the picture? Be out there looking for the next change.The moral of the storyFew of us were alive when the Titanic sank, but all of us lost something that night. Hopefully, we recognize the lessons learned and chart our course toward the right direction. Let’s not make the same mistakes so we can avoid our own Titanics.Gregory P. Smith leads the management consulting firm called Chart Your Course in Conyers, Ga. He can be reached via e-mail at [email protected]

Juneau Gottschalks reopens at new, expanded location

JUNEAU -- Gottschalks opened its doors for the first time July 15 in the 36,400-square-foot space formerly occupied by J.C. Penney Co. Inc. in the Mendenhall Mall in Juneau. The move increases Gott-schalks’ store size by about 16,000 square feet and provides an anchor store for the mall, brokers who arranged for the store to sublease the space from J.C. Penney said last month."Unless you weighed 90 pounds, the (Nugget Mall) store was really tight," said Mike Schmidt, Gottschalks’ director of stores. "Now we’re more spread out and have more brand names."The Nugget Mall location is closed, Gottschalks’ management said.J.C. Penney closed about four years ago but was obligated to pay its lease through 2007, and the store’s brokers said they had been searching for a business to lease the space since October 2001.According to store manager Debbie Oleman, the new location gives Gottschalks flexibility and room to grow."The square feet we devote to each department depends on what the customer wants," Oleman said. The company plans to adjust as the needs of the community are gauged.Schmidt said Gottschalks has 73 stores across the country, some of which are more than 200,000 square feet. Even though the store has nearly doubled in size, Schmidt said it can’t have the same product assortment other Gottschalks carry down south, but employees can get anything the stores there carry if requested."There is one dirty word that nobody in the store can say," Schmidt said. "That is the word ’no.’ If we don’t have it in the store, we can get it."Gottschalks opened within 30 days of getting the lease, with crews working into the night to install new carpet and paint, Schmidt said. Oleman added that visually, the store has changed tremendously.Gottschalks has increased its staff, but is looking for more employees."Opening the new store has made people more interested in working for us," Schmidt said. "Our best employees come from our customer base. We try to be a hometown store."Resident Ivanka Simatic, who waited outside the store to be the first inside, said she was looking forward to seeing the Liz Claiborne collection, and hoped there would be more size selection."This store is much much better," Simatic said. "The other store was way too small."

Kenai Wild fish branding program sets sail in Cook Inlet

KENAI -- The drive to invigorate the Cook Inlet salmon industry is on.After all the marketing and money invested, the opening of the commercial fishing season in the Inlet last month meant time for action. Four seafood processors, 30 to 35 commercial fishermen, and a salmon buyer agreed to participate in the $400,000 Cook Inlet Salmon Brand Inc. program. They are following a plan that hopes to bring to the fresh and frozen Inlet salmon fishing industry the ability to compete with farmed salmon.Success could mean revitalization and stabilization of the commercial salmon fishing industry.Fish can earn the "Premium" grade, the higher of the two grades available, or grade "A," the second level.Although much of the process fish follow from gillnet to market does not change for this program, significant steps have been added along the way to assure consistent quality before the Kenai Wild certified seal is placed on an Inlet sockeye.Bleeding and chilling at sea"These program fish are pretty hard to do on boats these sizes unless it’s a (slow) day," said Ninilchik driftnet fisher John McCombs July 11 from the helm of his 33-foot commercial fishing boat, Katydid.He said the previous Monday’s opening produced fewer fish set aside for the program due to a steady stream of fish and inexperienced help.On July 11, McCombs only caught 72 fish. He pulled in his gillnet after a second set off the Katydid’s stern only to find three fish. Undaunted, he began following the procedure to make his catch meet the standards of the branding program.Carefully, he untangled the sockeyes from the net and reached into each one’s gills."See," McCombs said, tearing at one fish’s breathing organs, producing an immediate flow of blood. "You rip out their gills like this. Now, this is a program fish."He then passed each fish off to his deckhand, 15-year-old daughter Maureen, who stowed them below deck in a storage hold filled with almost 600 pounds of ice. Even with the three reds chilling below, he expected later catches to stand a better chance of passing muster for the seal."If you do program fish, you should take them out of the last set of the day," McCombs said. "That way, they’re fresher."During the day, he pointed out spots on a few of his fish, like sores and net marks, that could warrant demerits from inspectors onshore."These bruises are net marks," McCombs said, pointing at a set of heavy, black lines just behind one sockeye’s gills. "They don’t want those."His fish were accepted as program fish, for this first layer of grading. They would be grouped together with more fish for subsequent scrutiny, but the program has no means in place to track them from this point.McCombs said he became involved with the program because he was interested in promoting consistent quality."Everybody can take better care of their fish," he said. "There’s got to be some way to show more value. Hopefully, branded fish will do that."Scrutinizing salmon once they reach landChristine Keenan, a seafood inspector for Surefish Quality Specialists, stood outside Deep Creek Custom Packing in Ninilchik the evening of July 11 peering into totes filled with ice and freshly harvested sockeyes."I’m making sure the quality meets the standard," Keenan said.That standard calls for fish to be bled and chilled on fishing vessels and handled with care, she said.Processors must get fish to the plant as soon as possible, keeping the fish on ice and taking care not to rough up the fish’s skin. Once fish leave the ocean and are killed, their bodies begin to deteriorate, making them susceptible to easy bruising.Keenan said she looks at specific features of the fish to determine the level of care each salmon has received before reaching her. She looks for the amount of scales and for marks, she said."If the skin is soft and wrinkly, or if it is bruised, I know it has not been iced," she said. "Then I look at the eyes for clarity and I look at the gills to see if (the fish) has been bled. I also look for a yellowish or pasty white slime on the fish. Colored slime is bad, but a clear slime is normal."Keenan also takes each fish’s temperature using a rectal thermometer. She said driftnetters’ salmon should register 32 degrees Fahrenheit, while setnetters, whose fish often are exposed to elements and on ice for shorter periods, are expected to return fish at about 38 degrees.But there is no exact science to grading the sockeye, she said.Inspectors have to use their own judgment, and clearer rules will come as the program transitions from its pilot stage. Since fishermen turn fish over to the program on a voluntary basis, there’s little pressure to have everyone meet standards, she said."You can tell when you’ve been looking at fish long enough, how long they’ve been iced," she said. "If they run into any trouble, they’re not required to bring the fish in."Packaging and a second lookMark Powell, Cook Inlet Salmon Branding president and owner of Alaska Salmon Purchasers Inc., reiterated the importance of enforcing quality standards in a meeting July 12 at Snug Harbor Seafood in Kenai. A Surefish inspector and two Kenai Peninsula Borough employees training as inspectors also attended the meeting."The integrity of the label is everything," he said. "Take no prisoners on that."Friday the trio, Karin Ho-brook of Surefish and borough hires Brandi Ohlsen of Sterling and John DeVolld of Soldotna, oversaw the filleting process at Snug Harbor’s custom packing arm, taking a second look at sockeye meat caught the previous day."We have to follow the fish everywhere it goes to make sure at each step people are following the program handling procedures," Holbrook said. "Hopefully, by the third year, we can self-certify some people so we can just audit quality every so often."Ohlsen said this first year of the program has the inspectors working frequently to pave the way for standards that will not require such stringent oversight."We’re more hands-on right now," she said. "We’re getting people used to our standards."At the plant, the three inspect for texture, color, pin bone removal and gaping, the separation of the muscle fibers. The inspectors also take random samples of fish after being headed and gutted, filleting selected salmon themselves. And Ohlsen said they look for butchers’ defects.Holbrook said the high mark premium grade does not allow for many defects."Premium is basically perfect fish," she said.Holbrook said the "A" grade is still preferable to no fish at all, and said many salmon miss getting in the program due to a misunderstanding that premium is all the program will accept." ’A’ grade just has to be chilled but can be dead in the net," she said. "Setnetters believe because their fish aren’t bled alive, they can’t be ’A,’ so they’re not submitting them."As of July 12, 7,122 pounds of fish of the 10,000-pound goal set for the program had been certified.Marketing: getting the word outPowell said the program is on target with reaching its initial test market. Samples of salmon fillets embossed with the Kenai Wild logo will be sent directly to 12 high-end seafood buyers in the Lower 48, including regional restaurant and grocery chains from the Pacific Northwest to the Northeastern Atlantic.Chris Mitchell of Seattle’s marketing group Seafood Market Developers works with the branding project finding and building relationships with potential direct buyers. Mitchell said these first impressions with potential long-term wild salmon buyers could make or break the program."We’re talking to the people who are willing to pay more for a better fish," he said. "That’s why it’s critical that for sure on these samples there’s perfection."Mitchell said the end-goal will be split between fillets and headed and gutted fish. But he said the market wants more fillets and restaurateurs want to be able to go straight to the oven with the wild salmon they receive.He said headed and gutted fish could bring in $2 per pound, where fillets could get double that price."In order for this fishery to survive, they need that $4," he said.

As it grows larger, borough's population also gets grayer

KENAI -- As the population of the Kenai Peninsula grows larger, it also is growing older, according to new U.S. Census figures included in the latest quarterly report of key economic indicators published by the Community & Economic Development Division of the Kenai Peninsula Borough.The report shows the population of the borough as a whole grew by 8,889 people in the decade of the 1990s, reaching 49,691.The central peninsula region grew the fastest, with the largest gains in the unincorporated areas.Meanwhile, as the population of those between 45 and 54 years of age more than doubled, fewer children were being born and the number of young adults between 25 and 34 fell by almost a fourth.Helping to push the median age upward from 31.1 to 36.3 years of age during the preceding decade was the relatively rapid growth of the senior population.Those 65 to 74 years of age grew from 1,489 in 1990 to 2,361 in 2000, a 58.6 percent increase. Those 75 to 84 years bounced 157 percent from 419 to 1,077, and those 85 years and older went from 79 to 211, a 167.1-percent jump.The bulk of the peninsula’s population, some 23,461 men and women, or about 47 percent, are between 25 and 54 years of age.The borough’s population remains relatively young, but it is older than the state as a whole, where the median age is 32.4 years.Seldovia has the oldest average age at 45.3 years. Homer and Seward both slightly exceed the borough median, while Kenai and Soldotna are slightly lower.The 2000 census split the borough into four regions: central, southern, eastern and western. The growth in the central peninsula outstripped every other region, said Jeanne Camp, an economic analyst with the division.The central region now is home to better than six of every 10 borough residents. Most of the growth occurred outside borough cities.For instance, Moose Pass grew 154.3 percent, Bear Creek jumped 201 percent, while Anchor Point’s population rose by 113 percent, according to the figures.Other statistics tell more about the peninsula. Males make up 52 percent of the borough population, females 48 percent.Better than 86 percent of the peninsula’s population is Caucasian. The next largest group, 7.47 percent, is made up of American Indians and Alaska Natives.Asians make up 0.97 percent, African Americans 0.46 percent, and Hawaiians or other Pacific islanders comprise 0.17 percent of the borough’s residents. All other races account for 0.84 percent. Nearly 4 percent of the population is of mixed race origin.The population of the borough is relatively well educated.Some 88.3 percent of persons over the age of 25 in Kenai, which has the largest population among the cities at 6,942, are high school graduates and 16 percent have college degrees.Of Soldotna’s 3,759 residents, 87.6 percent of those over 25 have finished high school and 15.5 percent are college graduates.In Homer, with a total population of 3,946, those figures are 92.4 percent and 29.2 percent respectively, while in Seward, with a population of 2,830, the figures are 86.7 percent and 15.9 percent respectively.

White House wants different incentives for building Alaska gas line

FAIRBANKS -- The Bush administration wants to replace a proposed tax credit for Alaska natural gas sales with some other type of incentive that doesn’t set a gas price floor, Sen. Frank Murkowski, R-Alaska, said July 18 after a meeting at the White House.Sen. Ted Stevens and Rep. Don Young, both Alaska Republicans, also attended the meeting.The Senate version of a national energy bill proposes a tax credit that would kick in when gas prices fall below $3.25 per million British thermal units at a hub in Alberta, Canada. The amount taken off the gas owners’ tax bill would be the difference between $3.25 and the actual sale price.Murkowski said the Alaska delegation pointed out that the tax credit would have to be paid back when prices rose, but that didn’t allay the administration’s worry. He said other gas producers fear they won’t have the same safeguard that Alaska gas would have.The gas provisions will be the subject of negotiation in a conference committee formed to work out differences between the House and Senate versions of the energy bill.Administration officials suggested that a combination of other incentives would be less harmful to other gas sellers, Murkowski said. Those incentives could include: Tax credits for development of oil and gas that is technologically difficult to extract. Loan guarantees. Changes that allow the value of the pipeline to depreciate faster than normal for tax purposes."What we agreed is to continue to work in an expeditious manner to address the various ways the federal government could participate in this process," Murkowski said."The feeling was that, yes, it’s in the national interest," Murkowski said. "The question was, ’What is the meaningful role of the government?’ Is it limited to tax incentives, accelerated depreciation, tax credits and so forth?"Stevens had to cut his White House visit short because of work on spending bills, so he declined comment on the meeting.Murkowski said White House officials attending the meeting included Larry Lindsey, the president’s top economic adviser; Glenn Hubbard, chairman of the Council of Economic Advisors; Karen Knutson, an aide to Vice President Dick Cheney who used to work for Murkowski and hails from Ketchikan; and Marcus Peacock, associate director for natural resources in the Office of Management and Budget.

Borough acquires Ketchikan mill

KETCHIKAN -- Ketchikan Gateway Borough officials sealed a last-minute deal July 16 to buy a defunct veneer mill.The borough closed a deal with the mill’s major creditor, Foothill Capital Corp., which had loaned the former Gateway Forest Products $14 million to operate the business.Ketchikan officials had been working frantically along with state officials to avert an auction of veneer mill equipment in hopes of continuing to operate the plant and preserving local jobs.The borough agreed to pay $2 million for the mill and equipment and pay related expenses for the auction. It also will absorb $320,000 in back taxes on the property."It’s what we think the auction would pay," said William Shiao, Foothill senior vice president.The final cost to the borough for the mill and associated expenses could top $2.6 million, said Steve Corporon, acting borough manager.Other equipment, including Gateway Forest Products assets that the company received from the old Ketchikan Pulp Co., and which were not related to the veneer plant, were auctioned as scheduled.Borough officials swooped in to buy the mill after the Alaska Industrial Development and Export Authority was unable to negotiate a price with the creditor to avert the auction.The state development agency hopes to form a three-way partnership with Sealaska Corp. and Timber Products Co. of Oregon, to supply and operate the mill.Under AIDEA’s plan, the state development agency would lease the mill to Timber Products. Sealaska, the Southeast regional Native corporation, would supply wood for production of veneer products.The borough still intends to sell the facility to AIDEA in hopes that it can continue to operate the mill in an attempt to retain local jobs in a community hard hit by economic losses.Bob Poe, AIDEA director, said there is no immediate agreement with the borough to purchase the mill but he is hopeful a deal can be reached.The Ketchikan Gateway Borough paid for the mill by dipping into a $25 million economic disaster relief fund it received after the former pulp mill closed. It had $4 million left in the fund before the sale, Corporon said.Gateway Forest Products opened the mill on the site of a failed pulp mill in 1999 but ran into financial difficulties a year later.The company filed for bankruptcy protection in February 2001, claiming in court papers $45 million in debt including $15 million owed to the borough. Its request for Chapter 11 bankruptcy protection was dismissed and the property was to be liquidated.Borough officials continued to meet with Foothill on July 16 even as outside buyers were bidding on equipment being auctioned off.

Torgerson: Companies want gas pipeline risks kept to minimum

KENAI -- Sen. John Torgerson, R-Kasilof, announced to the Soldotna Chamber of Commerce July 16 that Duke Energy had told him it is pulling out of a consortium of gas-producing and distributing companies.Duke Energy is a gas distribution company that has been working toward bringing the plans for the Alaska-Canada gas pipeline to fruition.The company apparently made its decision after being informed by the major gas-producing companies that Duke would not play a large role in the distribution of any gas transported by the new line."Producers don’t want to play ball with those guys. They want to do it on their own," Torgerson said.Although Duke’s withdrawal essentially dissolves the group because it owns half of Canada’s representation as well as American holdings, losing the consortium is not the crux of the issue keeping a gas line from being built, Torgerson said.Gas-producing companies have made it clear that they will not begin construction of a pipeline until the federal government has instituted a way to mitigate some of the project’s financial risk, thus making it more appealing to financiers. Talks between the White House and Congress are under way to define an acceptable package of incentives for the line."It’s clear if they don’t get federal support, they won’t do a pipeline," Torgerson said of the producers. "The fact is a lot of risk is involved in this project. They didn’t become the largest in the world by being fools."

Scientist finds 10 kinds of crabs inhabiting underwater mountains

KODIAK -- Kodiak-based crab biologist Brad Stevens recently returned from an underwater adventure exploring sea mountains located thousands of feet below the surface in the Gulf of Alaska. He made a similar trip three years ago with the intent of finding out what species of crab live in very deep water."We went out looking for four commercially exploitable species and we came up with a total of 10 species of crabs, six of which we hadn’t known about," Stevens said.In June, Stevens made several dives to Patton Seamount, using the submarine Alvin that was transported aboard the research vessel Atlantis based in Woods Hole, Mass. This time the focus was on juvenile crabs, particularly species like Golden King crabs, which are of high-market value. He found the young crabs living at deeper depths than the adults and concentrated on a narrow band along the seamount, an underwater mountain.Another crab species Stevens saw from his cramped quarters aboard the submarine was Spider King crabs, which he says have a body about the size of a Tanner crab but with pencil-thin legs about 2 feet long. "It looks like a daddy longlegs on steroids." Stevens said.Although the crabs aren’t very marketable, Stevens says studying them can help him learn more about crab habitats and behavior.One exciting moment of his underwater journey was what Stevens called the "attack of the flying squid." This happened when a school of squid converged on the submarine Alvin. "It’s just amazing to see these things go whizzing by. You could see them hovering right in front of the portholes."It will take months for Stevens to view the videotapes and analyze the data, but he hopes this summer’s dives will add to his growing body of knowledge about crab species that live on these underwater mountains.Cash for tagsSome lucky halibut fishermen could be in for a bonus when he or she pulls up one of the big flatfish. This summer the International Pacific Halibut Commission and the U.S. Geological Survey are conducting a tagging project in waters off Alaska and British Columbia. Two dozen halibut are fitted with small microphone-shaped electronic satellite tags designed to transmit data on where halibut migrate between their feeding and spawning seasons.Each tag costs $4,000, which is why so few fish are wearing them. If a fisherman lands a halibut with the whole tag intact and returns it to the IPHC, they will receive a $500 reward. Tags can be sent directly to the halibut commission’s office in Seattle or given to a commission port sampler.View on valueThe value of the Bristol Bay sockeye salmon catch is estimated about $25 million this season. That’s down from last year’s $37.7 million, which was the lowest value since 1977. Early projections peg the overall value of this year’s salmon catches at $130 million, down from $216 million last year. In 1988, Alaska’s salmon catch was worth $768 million at the docks.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at [email protected]

Alaska Airlines eyeing Adak contract

At least three airlines are eyeing service to Adak under a federal contract that has been the most costly in the nation.Company officials from Alaska Airlines, Peninsula Airways Inc. and Evergreen International Inc. have indicated they will bid on the service to the Aleutian Island community of about 100 that is struggling economically after its 1997 U.S. Navy base closure.The U.S. Department of Transportation began accepting bids for the subsidy July 8, after canceling Evergreen’s two-year $1.5 million contract when the airline failed to provide promised jet service. Bill Mosely, spokesman for the Department of Transportation in Washington, D.C., said as of July 19, no bids have been received under the agency’s Essential Air Service program. Airlines have until Aug. 7 to file with the agency for the federally subsidized route.Joe Sprague, Alaska Airlines’ director of sales in Anchorage, said the airline is running numbers on the 2,600-mile round trip-route and is hopeful that increased economic activity in the area, combined with a federal subsidy, may make the flight profitable."Count on us to bid on it. ... We are analyzing the possibility and see at least some potential," Sprague said.Passenger and freight revenue alone would not allow jet service to the Aleutian Islands’ community, he said."It would not be economically viable for a jet without the subsidy," Sprague said.Jerry Rock, president of Evergreen’s Alaska operations, did not return telephone calls from the Journal.A company official, who asked not to be identified, said the airline would resubmit a bid for the service.The McMinnville, Ore.-based airline was awarded the two-year contract in July 2001 based on its proposed purchase of a Boeing 727-100 combined passenger and cargo jet. The "combi" is better able to handle cargo and the region’s notoriously bad weather than propeller aircraft, according to written decision last summer by the federal Transportation Department.But over the last year, Evergreen has only provided once-a-week mail and freight service with its DC-9 cargo jet to Adak. Peninsula Airways has been providing passenger service with prop aircraft, under an interim federal award of about $4,000 weekly.PenAir has charged about $1,100 for a round-trip ticket from Anchorage to Adak.Evergreen has been paid roughly $7,000 for each of its weekly cargo flights, according to DOT’s Mosely.Evergreen blamed the events of Sept. 11 and new bypass mail rules for not purchasing the combi jet it promised when it won the subsidy last year.PenAir has been flying to Adak since December 2001 when Reeve Aleutian Airways went out of business. Reeve had operated two Boeing 727-100 combis that serviced Adak and other Aleutian destinations, as well as the Russian Far East.Reeve operated its flights with no government subsidy.PenAir officials have said they will resubmit a bid for the subsidy, although they are concerned that it requires use of an airplane with a minimum of 60 seats. The company is asking that the requirement be lifted, and its officials are seeking legal and congressional avenues to get it done.In its year-long interim service, the airline usually fills only six seats per flight to the Aleutian island community, said Dick Harding, vice president of Anchorage-based PenAir.PenAir’s Saab 340Bs, the airline’s largest plane, only have 30 seats.Mosely said community officials in Adak can ask to have the seat requirement amended.That’s unlikely, however, as the community has fought hard for jet service and backed Evergreen’s proposal last year, the only bid that said jets would be used.When Evergreen didn’t provide a jet after a year, the community and members of the Aleut Corp., which owns the abandoned Navy base now, lobbied successfully to have Evergreen’s proposal canceled.The federal contract last year drew five bids from carriers, with proposals ranging from $1.3 million to $2.1 million annually for flying cargo and passengers to Adak.The subsidy at the time had drawn criticism from some state officials who questioned if the federally subsidized route to the tiny community would be money well spent, since more than 150 communities in Alaska qualify for subsidized funding for air service, but receive none.Adak officials say the subsidy is needed to help the struggling community grow its economy. The Aleut Corp. has been planning to use the existing airfield and deep-water port for such things as a refueling and reprovisioning facility, and as a fish processing center for the Aleutian area.Some 33 communities in Alaska and 86 nationwide receive a subsidy from the federal government under the Essential Air Service Program, established in 1978 to ensure small communities retain a link to the national air transportation system, according to DOT’s Mosely.The program’s annual budget is $50 million, Mosely said.

Steese Highway will remain open

CIRCLE -- The Steese Highway will remain open this winter after all.Gov. Tony Knowles, at the end of a trip to visit the affected communities of Central, Circle, and Circle Hot Springs, announced that he will order the state Department of Transportation and Public Facilities to fund winter maintenance on both the road and the Circle Airport and let the Legislature next year deal with the added expense in a supplemental budget.Knowles told the Fairbanks Daily News-Miner that his trip up the Steese July 17 was only supposed to be for gathering information. But he said arguments by residents of Central and Circle convinced him closing the road would be "devastating."More than 50 Central residents and 30 from Circle told Knowles that the closure would decimate the infrastructures of each community, resulting in the potential loss of telephones and utilities, in closed businesses and at least one closed school, and in residents having dramatically limited access to medical services."If you close the road, you are pronouncing a death sentence on the village, and you’re going to kill people that live here," said Central resident Chris Kriendler. "Everything that we need to live, you are cutting us off from."Knowles said much of what residents told him had been reflected in reports on the potential closure, but he told the crowd in Circle that he needed to make the trip to gauge the human impact."You’ve got to look somebody in the eye," he said. "Unless I hear about it, I won’t really understand, face to face, what it means."Knowles and Sen. Georgianna Lincoln, D-Rampart, rode a school bus from Circle Hot Springs to Central. Schoolteacher and principal Marcy Jasper said the vehicle was often used for field trips to Fairbanks."We could not be able to go for cost of air fare," she said.The Central meeting was held in a classroom of the Far North School, which would likely have had to close due to lack of students if the Steese had shut down for the winter.Residents of Circle held their meeting inside the village’s half-completed tourist lodge. As was repeatedly stressed to Knowles, the lodge was intended to make much of its money off winter tourism."Having it in that building, I thought, was a genius stroke," Knowles said.Knowles announced his decision at the end of the Circle meeting, then communicated it back to Central by phone. He will order the DOT&PF to reinstate $225,000 to keep the Steese open in the winter and another $14,400 to keep the Circle airport open."If you believe in Alaska, then you don’t start cutting communities off and tossing them overboard," he said.The issue of the Steese closure surfaced as the Legislature worked on the state operating budget. The Republican-led House and Senate cut requests from several departments, including DOT&PF.Department officials issued a list of services that they said would have to be curtailed if the smaller amount were approved, including winter maintenance of the Steese.

Losses prompt sale of ACS TV

Alaska Communications Systems is negotiating to sell its television subsidiary, citing a reluctance to spend money to upgrade the money-losing unit to digital broadcast format.Two or three bids were received by late July, and company officials hope to complete the sale soon, said Mary Ann Pease, vice president of investor relations. Company officials would not disclose the identity of the bidders.After studying the costs associated with converting the television broadcasts from analog to digital, ACS instead chose to focus on its wireless and broadband business lines, and building systems for the state telecommunications contract, she said.Another deciding factor was that ACS Television LLC had been losing money, she said.The decision to sell the operation was made during the first quarter of this year, according to quarterly financial reports. The company recorded a one-time charge of $6.9 million associated with the television unit.ACS Television, formerly Alaskan Choice Television, provides wireless cable television broadcasts via UHF frequencies in Fairbanks, Anchorage and the Matanuska-Susitna area.The quarterly report also noted competition in the television broadcast market from satellite and cable television providers.General Communication Inc. owns cable television operations in the state, while Microcom in Anchorage operates Alaska Digital Satellite, provider of Dish Network services.Art Schumann, vice president of Microcom, has seen changes to the Alaska market."Wireless cable services have not, in my mind, been competition to cable," he said.Although ACS TV provides a good niche service, such smaller television services have had a hard time keeping up as technology has advanced, Schumann said.Also, switching to digital can be costly, he said.New satellites, like the Echostar 7 launched in February and operational in May, have provided expanded television service in Alaska, Schumann said. That satellite gives Schumann’s company the ability to offer broadcasts from local television stations, although the debut of the service depends on negotiations with area broadcasters, he said.According to ACS’ 2001 annual report, ACS TV had 1,900 customers. At that time, ACS considered building up the television division. "ACS Group is evaluating opportunities to expand its offering of wireless cable television services," according to the annual report.Alaskan Choice Television was owned in equal parts by ATU Telecommunications, Juneau-based Native corporation Goldbelt Inc. and a group of private investors, according to Gary Droubay, Goldbelt president.Anchorage lawmakers and voters decided to sell the city-owned telephone utility in 1998, choosing ACS as high bidder later that year.In September 1999, ACS acquired full ownership of Alaskan Choice TV.

Firm helps Hispanic community stay in touch

After overcoming past hardships, Angela Jimenez now runs a busy company and serves as an upbeat advisor for Alaska’s Hispanic community.Her Anchorage business, the Hispanic Service Center, or translated in Spanish as Centro de Servicio Hispano, provides bookkeeping, tax and translation services. The center, at 852 W. International Airport Road, also handles money wiring, so Hispanic Alaskans can send funds to relatives abroad. Another aspect of the business is selling long-distance phone cards."It’s a huge business here," she said.Jimenez moved from New York to Alaska in 1995 with her three young daughters because she couldn’t find a job. She started classes at the University of Alaska Anchorage, got a job at a certified public accountant’s office and left the public assistance system.When some people who had helped the Hispanic community moved out of state, Jimenez began providing some business services -- like tax help and filing immigration forms -- from her home office."At one point, I had a clientele of 150 people at my home," she said.Jimenez quit her job last year at the CPA’s office to start the Hispanic Service Center.The center currently has more than 400 clients, she said. During tax season, the office was packed with customers, Jimenez recalled.Jimenez has recognized the need for business services for Hispanics living in Alaska. Often they do not know the tax or other paperwork details of starting a business or managing real estate, for example, she said."I have become their information center," Jimenez said.Jimenez is studying to obtain a real estate license, which would help her be better suited to counsel clients. Adding those services is ahead of the schedule outlined in her business plan by more than a year.Personal goals are also important to Jimenez.She has purchased a home and completed all but one class for an associate’s degree in accounting at UAA.The number of Hispanic people in Alaska is increasing.During the 1990s, the Hispanic population in the state grew 10.5 percent, according to the state labor department and census figures. Hispanic Alaskans in 2000 totaled 25,852 or 4.1 percent of the state population.By contrast, the population of whites in Alaska, although representing 73 percent of the population, grew at just 0.8 percent.Jimenez, who was born in the Dominican Republic and is a naturalized U.S. citizen, helps customers prepare resumes, job applications and mortgage paperwork. She translates birth and marriage certificates, and has even performed four weddings.She sometimes refers clients to lawyers or real estate agents.The businesswoman intends to compile a guide listing area lawyers, real estate agents and others who can serve the Hispanic population.The Hispanic Service Center is open six days a week, and Jimenez, who now has two employees, is considering adding another employee for next tax season.Starting the business wasn’t easy, however. Jimenez attended a business start-up class offered by YWCA of Anchorage’s WOMEN$fund, where she met its director, Jennifer Abbott.A previous bankruptcy filing in New York thwarted Jimenez’s attempts to obtain a loan from WOMEN$fund or other banks. When Jimenez was almost ready to give up, Abbott encouraged the aspiring business owner.Jimenez decided to start the business with $5,000 from her savings and family support.The first thing that impressed Abbott was Jimenez’s well-behaved daughters, who had to attend the course due to a lack of childcare.Abbott was also struck by Jimenez’s attitude. "She was so hopeful and determined," Abbott said."She had such authority and confidence, and I thought, ’That woman is going to go places,’ " Abbott recalled.The Hispanic Service Center now has enough business to pay the bills, said Jimenez, who expects to "have a couple dollars in the bank" in a few years."I see a lot of future in this," she said.One day Jimenez would like to open larger Hispanic Service Centers with Spanish-speaking people in different mall-type spaces providing even more services.Now, though, Jimenez’s main goal is to ensure her customers do not leave empty-handed."Everyone who comes here goes out with an answer," she said.

Money manager confronts bears on Wall Street

Money manager and avid outdoorsman Brad Fluetsch says wandering through the wilds of Alaska and Wall Street are equally dangerous."Survival is about avoiding the bears," said Fluetsch, chief executive of Juneau-based Raven Asset Management LLC.With Wall Street’s ethical collapse and a feared long bear market on the horizon, being an investment advisor nowadays can be like walking around a bruin-infested forest with a T-bone around your neck."Everybody has gotten mad at their broker or advisor," Fluetsch said of investors stung by the recent number of frauds, misleading corporate financial reports and insider trading cases."It would have been nice to see everything in advance; it would be a lot easier to position portfolios," said Fluetsch. "But no one did."Consequently, investors are leery of the stock market and are diverting money from stocks to bonds, or doing nothing at all.But Fluetsch, 39, is bullish, saying the economy is not nearly as bad as it seems. Consumer spending is strong and major companies have reported good earnings. And while the exchange has nose-dived, there are some bargains to be had on the stock market right now."This is the time people should be buying stocks," Fluetsch said. "When you put something on sale at Nordstrom’s, people flock there. When stocks are put on sale on Wall Street, people flee."Among younger people, there is a general distrust of investing now. Many teen-agers and 20-somethings are apathetic toward putting their money to work due to the recent rash of accounting scandals, Fluetsch said."I’m afraid it could keep a whole generation from investing," said Fluetsch.He’s doing his part to shore up confidence in corporate America and the exchange. For the last six years, Fluetsch has taught money management, business and finance classes at the University of Alaska Southeast in Juneau.In his classroom, or in conversations with friends, Fluetsch lights up and speaks with a genuine passion when it comes to money and investing."I enjoy what I do," Fluetsch said. "Making people understand money and investing helps change and improve peoples’ lives."Fluetsch recieved a business degree from Washington State University in 1986. He is a member of the Tlingit and Haida Tribes of Alaska. For several years following, he worked at Juneau-based Sealaska Corp. as its senior financial analyst.Fluetsch, a Tlingit, impressed then-Sealaska President Byron Mallott with his financial savvy, which helped lead to record earning years for the regional Native corporation and its 16,000 shareholders.When Mallott became executive director of the Alaska Permanent Fund Corp. in 1995, he hired Fluetsch to help manage the state’s nest egg."The permanent fund gave me large institutional experience," Fluetsch said. "Sealaska was a great place for me to start and to be educated."Fluetsch in 1996 became a Chartered Financial Analyst, a globally recognized standard for measuring the competence and integrity of financial analysts. He said he is one of only a handful of Native Americans to hold the title and only one of two Alaska Natives."He’s also one of the youngest folks to obtain a CFA, which is not an easy thing to do," Mallott said. "I think that gives you a sense of his work ethic and intellectual capability."Mallott said Fluetsch proved himself at the Permanent Fund Corp."Brad, day-to-day, managed all of the corporation’s cash, and on any given day, he moved up to $1 billion," Mallott said."If he had wanted to stay on at the permanent fund, within five years he would have been the chief investment officer, one of the choicest jobs in the business, not just in Alaska, but anywhere," Mallott said."The investment world is his life," Mallott said. "He’s a fellow who wants to make his mark on this world, on his own. He has an incredible future ahead of him."David Rose, chairman of the Anchorage-based Alaska Permanent Capital Management Co., has similar accolades for Fluetsch, and invested in Raven Asset Management when it started three years ago."He is a young man with a great deal of potential and talent," said Rose, who served as the Alaska Permanent Fund Corp.’s first chief executive, from 1982 until 1992.Rose said Fluetsch runs Southeast’s only asset management company."It’s a tough business," Rose said. "It usually takes five years for someone to be successful. Until then, most of them starve to death."Fluetsch currently manages about $12 million, from both individual and institutional accounts, including some Native corporations."I’m surviving this tough market, and I’ve doubled assets every year I’ve been in business," Fluetsch said."Brad has stuck with it in pretty grim times, but it is his stick-to-itiveness that helps him," Rose said.Fluetsch is up before 4 a.m. every morning, monitoring Wall Street, and reading most of the nation’s business publications before most Alaskans have had their first cup of coffee. "I’ve always been amazed by people in Alaska who work the market but don’t work market hours," Fluetsch said.Even though Fluetsch has more than 16 years experience as a money manager, his relatively young age and even more youthful appearance probably work against him, Rose said."Young guys are often much smarter than old guys, but old guys get the business because we look like we have experience and a reputation," Rose said. "It helps to be whiskered."Fluetsch said he’s getting a few gray hairs."The market, recently, has aged me fast," Fluetsch said. "It’s run me around the block a few times."Fluetsch is a Republican, a political persuasion that goes against the grain of the majority of Alaska Natives.When it comes to prefering a party label, Fluetsch said, "I am the sore thumb.""Actually, most Natives are conservative, but not Republican," Fluetsch said. "When it comes to family, clans and our sense of community, those are conservative values," Fluetsch said. "We serve our county in the military at a higher rate proportionally than does any other group in the United States and we tend to vote at a higher rate, proportionally," Fluetsch said.Fluetsch is heavily involved in the Native community. He serves as a tribal councilman for the Douglas Indian Association and as grand treasurer of the Alaska Native Brotherhood. He was elected as a trustee to the Kootznoowoo Permanent Fund Settlement Trust in 1999 and served on the National Congress of American Indians Trust Fund Policies and Procedures Working Group in 2000.

PenAir questions transportation study

The state’s largest commuter airline seems to be getting little respect.Peninsula Airways Inc. officials say a $240,000 federal grant to study the aviation needs of six Aleutian communities served by the airline is a waste of taxpayers’ money.PenAir’s more than 40 years of service to the Aleutians should be study enough, airline officials say."The market is not big enough for two airlines," said Dick Harding, vice president of Anchorage-based airline.PenAir currently is the only airline to provide scheduled service to King Cove, Sand Point, Akutan, Cold Bay, False Pass and Nelson Lagoon.Those six towns were awarded the federal grant in July as part of the U.S. Department of Transportation’s Small Community Air Service Development Pilot Program, designed to help smaller communities enhance their airline service.A study is to be funded with the grant money to determine their air service needs in terms of aircraft, number of flights, and which airline should provide service. The communities are contributing $25,000 for the study.More than 175 applications for funds were received by the Department of Transportation for $20 million in grants. Only 40 applicants were awarded funds, including the one from the Aleutian communities. "This pilot program was established to provide small communities with financial assistance to address air service issues, such as insufficient service and high fares," said Sen. Ted Stevens, R-Alaska, in a press release. "Their inclusion in this pilot program is great news for these communities and our state."PenAir said it may be great news, but it’s unrealistic to think air service will improve any time soon."Competition has been there and it’s come and gone," PenAir’s Harding said. "As long as we have a free-market system, there will never be a need for an aviation study."Several airlines including Reeve Aleutian Airways and MarkAir have tried to serve the communities in the past, some of them with jet service. Both airlines are now out of business. Harding said the study will do little more than get hopes up in the communities that they will be served by jets in the future.Passenger and freight levels, however, do not warrant jet service currently, Harding said."Markets drive transportation; transportation does not drive markets," Harding said. "Everybody wants a jet with a bar, a stand-up cabin and pretty flight attendants. If the market would support a jet, we’d get a jet."When larger aircraft did service the Aleutians, airlines had to stop in several communities to fill an airplane. That service ran three days a week at most, Harding said. Smaller aircraft like PenAir’s are able to make direct flights more frequently, Harding said.PenAir operates a fleet of 40 aircraft to 36 communities throughout Southwest Alaska.Harding said he believes if another airline thought they could make money in the Aleutian market they would.Of the six communities awarded the grant, only Akutan is approved for a subsidy from the federal government under the Essential Air Service Program, Harding said.PenAir receives $360,000 annually for providing service to the community.

Grizzly's Inc. opens upscale shop in Anchorage hotel

The owners of a large Anchorage gift shop and other downtown businesses have opened a new retail store with a different merchandising theme.Global Image World Adventure Gifts and Accessories, a sister company to Alaska goods retailer Grizzly’s Gifts, offers an international mix of products, said retail manager Cathy Jackson.The new store opened in mid-June at the Hotel Captain Cook, she said.The idea for a store with international flavor came during merchandise buying trips, said Jackson, who has worked with Grizzly’s Inc. owner Bob Neumann for 15 years.Opening Global Image represents the company’s move to branch out, she said."We’re giving it a shot," Jackson said. "We’ll see how we like it."With items from Egypt to South America, Global Image draws different customers than Grizzly’s Gifts, she said. "It’s a great place for locals to shop," Jackson said.At just under 900 square feet, Global Image is smaller than Grizzly’s Gifts, which measures nearly 4,000 square feet, she said.Global Image is five blocks west of the heart of Grizzly’s Inc. operations, which include the larger gift shop, a hotel and a bar.Grizzly’s Gifts opened in 1986, Jackson said. In the same building Grizzly’s Inc. also operates the 26-room Historic Anchorage Hotel and Rumrunner’s Old Towne Bar.Neumann opened the restored hotel in 1989 and added the adjacent bar several years later. The businessman has operated other stores downtown including a small grocery and gift shops.During peak summer season, the businesses employ roughly 60 people, Jackson said.

Travel group selects Peck as president

The Alaska Travel Industry Association has chosen Ron Peck as its new president and chief operating officer.Peck most recently served as director of sales and marketing at Alyeska Resort. He has logged more than 25 years in the Alaska tourism industry. He served five years as director of sales and marketing for Princess Tours and Princess Lodges. Peck also worked nearly 20 years for Alaska Airlines. At the airline, his titles included reservations and customer service agent in Juneau, director of Alaska Airlines Vacations and director of marketing for Alaska, Russia and Canada.The new ATIA president started work July 22.Peck replaced Tina Lindgren, who in May announced she would resign effective July 12.Active in Alaska’s tourism industry since 1989, Lindgren helped consolidate the Alaska Visitors Association, the Alaska Tourism Marketing Council and the state Division of Tourism and create the travel industry association in 2000.Peck’s selection was the result of a three-month process which reviewed 43 statewide and national candidates. According to ATIA board chairman Dale Fox, Peck was chosen for his experience in the Alaska travel industry and his working knowledge of ATIA. Peck has served as a member of ATIA’s marketing committee.

Feared drop in tourism fails to materialize in Kenai area

KENAI -- In spite of some negative indicators early in the season, tourism on the Kenai Peninsula has not suffered as badly from the Sept. 11 attacks or setbacks in the sportfishing industry as expected."It’s not the big disaster that everybody predicted," said Dru Garson, marketing coordinator for the Kenai Peninsula Tourism Marketing Council. "But it’s not a record year, either. There are some people who have done better than others."According to a report from the Alaska Tourism Office in the Alaska Division of Community and Business Development, the number of visitors to the state has dropped from last year.The Alaska Monthly Arrival Report showed a 25 percent decline from May 2001 to May 2002 in visitors entering via the Alaska Highway, the only totally overland route those driving up from the Lower 48 can take to the peninsula.There were increases in arrivals at Ted Stevens Anchorage International Airport and via the Southeast Region of the Marine Highway Ferry System -- 11 percent and 5 percent, respectively.However, the numbers for all methods of travel show an overall decrease of 17,878 visitors this year.Jay Barrett, director of Kenai Visitors and Convention Bureau Communications, said visitors to the Kenai Visitors and Cultural Center have declined 12.5 percent over the past year between the months of May and June. He said the lack of road system users, as reflected in the arrival report, is unexpected."The highway numbers are down, and that’s a surprise to me," Barrett said. "Gas prices are down from last year. We get a lot of visitors who drive here in RVs. Maybe they’re driving to places nearer to their homes, or maybe with everything going on in the stock market, there’s not as much expendable income."The Kenai River early run king salmon closing last month also was thought to have an impact on tourists visiting the peninsula. But the decline in tourism volume was not enough to panic some business owners.The Aspen Hotel Soldotna has reported full or nearly-full bookings through the month of June and in the past weeks, said General Manager Rebecca Sorenson."The fishing business hasn’t affected us," she said. "We thought it would have an impact, but revenue has been great. We’re actually generating a little bit more revenue than our properties throughout the rest of the state."Darlene Nichols, co-owner of Hooked On Fishing Gifts in Soldotna, said fewer visitors have not slowed down her sales."This year has been slower in drive-in business," she said referring to customers visiting from Outside. "I’m not getting the normal six to 10 groups a week that I got last year. (But) our volume is pretty consistent. My business isn’t as volatile as some of the other gift businesses have been. We have a lot of repeat customers."Diversification has been the key to surviving what was expected to be one of the worst tourism seasons. Some business owners catering to tourists have found alternatives to the hot-spot tourist attractions. Others benefited from the closings.Sheri Lewis of Alaska River Guides in Soldotna said business did not take a hit in June because her clients were offered alternatives to king fishing, including saltwater trips out of the Kasilof River and rainbow trout charters."It really didn’t hurt us that badly, because we’re diversified," she said. "Actually, our June was OK. We didn’t have any cancellations."Sharon Baker, who co-owns Alaska Angler RV Resort and Afishunt Charters in Ninilchik said her business has steadily improved in spring and summer as compared to last year. She said the Kenai closings may have contributed to the gradual revenue increase."It might have helped our charters on the Kasilof (River)," Baker said. "There were some people who came to our park who said there was nothing to do in Soldotna."Garson said the adversity impacting the peninsula, both great and small, may have had a more profound effect on visitors and on the area as a whole."It brought some exposure to different parts of the peninsula and got some people to see different parts that maybe they haven’t seen before," he said. "Maybe they’ll come back again."

Union challenges Army contracting plan

FAIRBANKS -- The Army plans to contract out some of the work done by the public works departments at Fort Richardson and Fort Wainwright to a private, Seattle-based company.The move could affect up to 260 jobs held by maintenance workers, truck drivers, electricians, plumbers and groundskeepers on the posts.Chuck Canterbury, U.S. Army Alaska spokesman, said if the decision makes it through an appeals process, Shaw Environmental & Infrastructure Inc. will take over operations for public works at Fort Wainwright in Fairbanks and Fort Richardson in Anchorage by June 1.But American Federation of Government Employees Local 1834 President Scott Hunt said the local union will appeal the decision.Current government workers will get first chance at Shaw openings, but there’s no guarantee they’ll get the same pay or benefits they had while working for the federal government, said Steve Clapp, national representative for the union."The government has no profit motive in servicing itself," Clapp said. "The wages of the employees are set (by) the local market economy."But in the private sector, the contractor has to make a profit, Clapp said.Canterbury said Shaw submitted a bid that would cost 36 percent less than the in-house government bid. He didn’t know why the bid was so much lower than the government’s bid.As part of the appeals process, the union has requested information that will show why the gap between the bids was so large, Hunt said."There’s no way they could have underbid us that much without something going on," Hunt said. "People are very concerned. The work force was shocked at the amount of money (that) was bid."Individuals and unions have until mid-August to appeal the decision. It could take years before the appeal process is completed, Canterbury said.Canterbury said the decision came after a four-year cost analysis of public works. The directorate has roughly 600 people, a handful of which are military, at the two posts, Canterbury said.

Jury sides with Exxon Mobil in spill compensation suit

ANCHORAGE -- An Anchorage jury July 17 rejected claims by six Alaska communities that Exxon Mobil Corp. owed them $12 million in costs associated with the 1989 Exxon Valdez oil spill in Prince William Sound.During a six-week trial in state Superior Court, Exxon Mobil disputed the contention it owed money to Kodiak Island Borough, Seward, Cordova, Old Harbor, Larsen Bay and Port Lions. The Irving, Texas-based corporation said it already paid its bills -- more than $3.7 million."Our intention all along was to fully pay anyone with a legitimate claim," said Exxon spokesman Tom Cirigliano. "The issue here was whether those six plaintiffs had legitimate claims not reimbursed in the past. And the jury agreed with Exxon Mobil that the claims were not legitimate."The plaintiffs "obviously were disappointed" in the verdict, said Dave Oesting, one of the attorneys representing the communities."Apparently, the jury didn’t believe our facts or our economic expert," he said. "This case wasn’t terribly complicated."The case is unrelated to the main unsettled issue in federal court of how much Exxon Mobil will be ordered to pay in punitive damages to thousands of commercial fishermen, Alaska Natives, property owners and others harmed by the 11-million gallon spill.The 9th U.S. Circuit Court of Appeals in November found the $5 billion award levied against the international corporation in 1994 by an Anchorage jury to be excessive. The appeals court ordered the Anchorage federal district court to reduce it. Exxon Mobil has since told the court the award should be no more than $40 million.On July 17, Oesting filed a 100-page brief in the federal case, detailing the plaintiffs’ opposition to that amount. Plaintiffs now contend punitive damages should be no less than $4 billion.In the reimbursement lawsuit filed in state court, plaintiffs said Exxon did not compensate them for thousands of hours spent on cleanup by city employees that took them away from their regular duties.Michael Smith, an Exxon Mobil attorney, said the plaintiffs also sought interest, which could have increased the award to as much as $30 million.The state Superior Court initially dismissed the case, saying municipalities and villages could not ask for money for services they were hard-pressed to provide to residents during the cleanup.But on appeal, the state Supreme Court said the cities’ claims were valid and ordered a retrial in Superior Court.During the trial, Darryl Schaefermeyer, deputy city manager of Seward at the time of the spill, testified he received spill-related calls every day, including weekends, during the summer of 1989. He said that led him and other city employees to underestimate the amount of time they worked on cleanup when reporting the hours.Exxon attorneys, however, argued that cities can’t ask for reimbursement years later."We believe the jury recognized that we had, in fact, paid our bill and acted responsibly," Smith said.Plaintiffs have not yet decided whether they will appeal the verdict, according to Oesting.


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