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					 A R O U N D                     T H E             S T A T E                                                                                                                                                                                                            B O R D E R               B U S I N E S S

                                                                                                                                                                                                                                                                           Enron travails won’t affect
 Flying high                                                                                                                                                                                                                                                             teachers’ retirement benefits
 Southwest Airlines says it will add 4,000 jobs this year
                                                                                                                                                                                                                                                                         BY KELLY HILDEBRANDT
                                                                                                                                                                                                                                                                         LMTBusiness writer
     BY DAVID KOENIG                          Very few of those workers                                                                                                                                                                                                                                         You always have stock that’s doing good and
     AP Business Writer                     have been recalled, and                                                                                                                                                                                                        Many lost money when the
                                            Southwest believes it can                                                                                                                                                                                                    Enron Corporation filed for          stock that’s not doing good.
       DALLAS — Southwest                   choose from experienced                                                                                                                                                                                                      bankruptcy in December.
                                                                                                                                                                                                                                                                           The Teacher Retirement                                              - Cecilia Moreno,
     Airlines, which bucked the             applicants.
                                                                                                                                                                                                                                                                         System of Texas, which                           board member, Teacher Retirement System of Texas

     trend of layoffs and flight              “We’ve been seeing a lot of
     reductions after Sept. 11,             people who want a second                                                                                                                                                                                                     invested in Enron stocks in
     plans to hire about 4,000              career, and we’re seeing                                                                                                                                                                                                     1994, was no exception.
                                                                                                                                                                                                                                                                           The organization lost about
     workers this year.                     more       furloughed       flight
                                                                                                                                                                                                                                                                         $23.3 million, according to a        based more on the employees’          formula in order to diversify the
       The help-wanted sign at              attendants and pilots,” said
                                                                                                                                                                                                                                                                         letter    circulated     by    the   investments and successes or          organization’s stock portfolio.
     Southwest contrasts with grim          Lorraine Grubbs-West, the                                                                                                                                                                                                    organization’s executive director,   failures in the stock market,         She explained that they don’t
     personnel news from other              airline’s director of field                                                                                                                                                                                                  Charles Dunlap, dated Jan. 31.       Moreno said.                          invest in unstable companies,
     airlines. While a few are              employment.                                                                                                                                                                                                                    However, the losses to the           The key in investing stock for a    nor do they invest all of their
     calling back some of the                 Ron Jackson, a former                                                                                                                                                                                                      Teacher Retirement System of         defined benefits plan is              money in one type of investment
     workers they laid off last fall,       United        Airlines      flight                                                                                                                                                                                           Texas were a small percentage        diversification, Moreno said.         category.
     none are talking about                 attendant and electrician who                                                                                                                                                                                                of the total fund balance of $78       “You always have stock that’s         Though the fund might have
     creating new jobs.                     joined Southwest last year,                                                                                                                                                                                                  billion, said Cecilia Moreno, a      doing good and stock that’s not       lost money from 2000 to 2001
       Dallas-based Southwest is            said the carrier’s stability was                                                                                                                                                                                             member of the organization’s         doing good,” Moreno said.             because the stock market fell,
     the only major U.S. airline still      a factor.                                                                                                                                                                                                                    board. Moreno is also Laredo           That way if there are losses,       Moreno said that over the years
     making money. The largest                “We are always made to feel                                                                                                                                                                                                Independent School District’s        they      don’t     affect    the     it has actually increased.
     carriers,     American       and       comfortable that we are going                                                                                                                                                                                                administrative assistant for         organization’s ability to pay out       “The fund makes money in the
     United, lost $3.8 billion              to keep our jobs,” said                                                                                                                                                                                                      curriculum.                          benefits, she said.                   end,” Moreno said.
     between them last year.                Jackson, of Orlando, Fla. “I                                                                                                                                                                                                   The losses amounted to               Moreno explained that the             Dunlap stated that since 1990
       Southwest, however, was              can’t say I was ever worried                                                                                                                                                                                                 3/100ths of one percent of the       organization has an in-house          the fund has more than tripled.
     not immune to the slowdown             about that.”                                                                                                                                                                                                                 entire fund, Dunlap stated in the    money manager that created a
     in business travel that started          Merrill     Lynch      analyst                                                                                                                                                                                             letter.
     in 2001 or the steep decline in        Michael      Linenberg       said                                                                                                                                                                                              Though the fund lost money
     travel after the terrorist             Southwest’s ability to avoid                                                                                               AP photo/Dawn Dietrich
                                                                                                                                                                                                                                                                         from the stocks, Moreno said
                                                                                                                                                                                                                                                                         that     teachers’      retirement
                                                                                                                                                                                                                                                                                                                 METROPOLITAN AREA AT A GLANCE
     attacks of Sept. 11. It put            layoffs last fall has probably       STILL GROWING: Bill Waggener, who has worked for Southwest Airlines for three years, checks
     growth plans on hold and               raised employee loyalty and          his watch to make sure a passenger will make a flight on time, Monday, Feb. 18, at Love Field in                                                                                        benefits will not be affected.
                                                                                                                                                                                                                                                                           That’s because of the type of         Important Labor Statistics for Laredo, Texas
     delayed aircraft orders.               improved its productivity —          Dallas. Southwest, which has 33,000 employees, says it plans to hire 250 pilots, 1,200 flight
       In December, Southwest               already      considered        the   attendants and 2,600 other workers. At far left is Martha Carter and second from left is Kelli Jackson.                                                                                 retirement plan the Teacher
     announced it would take two            strongest      among       major                                                                                                                                                                                             Retirement System uses – a
     new Boeing 737s — the first            carriers.                                                                                                                                                                                                                    defined benefit plan. That
                                                                                 meaning they don’t operate         workers have been rehired.          The airline laid off 490 pilots
     additions to its fleet since the         “They tend to have some of                                                                                                                                                                                                 means the losses will not affect
                                                                                 the hub-and-spoke networks           American Airlines fired           instead of the originally                                                                                        the organization’s ability to pay
     terrorist attacks. But the hiring      the lowest costs in the              that all other large carriers      about 11,000 workers and            announced 850 and recalled                                                                                       teachers’ benefits, Moreno said.
     plans      are      Southwest’s        industry,” Linenberg said. “So       use. He said demand is             has recalled 3,100, said            400 ground employees but                                                                                           With a defined benefit plan, the
     strongest indication that it           in times of depressed                growing for Southwest’s low-       spokeswoman Andrea Rader.           has no plans for additional                                                                                      teachers and state each make
     believes it can regain its             business, they can make              fare offerings, often at           Hiring notices will go out April    hiring, a spokesman said.                                                                                        contributions to the fund. The
     previous double-digit growth.          money while others are losing        secondary airports.                1 to another 400 flight               Continental has recalled 500                                                                                   fund is then invested in stocks to
       Southwest,       which     has       money.”                                Major carriers have reported     attendants, she said.               laid-off flight attendants out of                                                                                make a profit, Moreno said.
     33,000 employees, says it                The major U.S. carriers lost       slow gains in passengers             American chief executive          8,000 people who lost their                                                                                        But the retirement benefits an
     plans to hire 250 pilots, 1,200        more than $6 billion last year.      since September, due partly        Donald Carty “has told the          jobs last fall but doesn’t plan                                                                                  employee is entitled to is based
     flight attendants and 2,600            Linenberg said the industry          to aggressive fare sales. But      employees that this is a            outside hiring, a spokesman                                                                                      on a formula rather than
     other workers. Officials said          would finally post a profit of       traffic still lags year-ago        rebuilding year,” with the goal     said. A Delta spokesman said                                                                                     whether or not the stocks
     that would match the hiring            $270 million in the third            levels — Southwest was             of rehiring many laid-off           the     company        had    no                                                                                 increase or decrease in value,
     pace the airline had expected          quarter, with Southwest              down 4.9 percent in January        workers, Rader said. AMR            announcements about hiring.                                                                                      Moreno said.
     last year.                             accounting for 70 percent of         compared to a year earlier,        lost a record $798 million in         Southwest said the new jobs           breaks and hairline cracks in the rail,” Dominguez explained. Any          “Your benefits are pretty much
       U.S. airlines announced              the gain.                            Fort Worth-based American          the fourth quarter and $1.76        would be spread across the              rail in which cracks or fractures are found are replaced right away,     spelled out,” Moreno said.
     about 100,000 layoffs after              Ray Neidl, an analyst with         fell   15.6     percent    and     billion for all of 2001.            59 airports where it operates           Dominguez explained.                                                       In Texas, teachers are paid 2.3
     Sept. 11. The actual number            ABN Amro, said Southwest             Houston-based Continental            United Airlines lost $2.1         and at nine reservations                 While the $60 million will increase the safety of the track, it will    percent of the average of their
     of layoffs was closer to               was likely to resume its             dipped 9.5 percent.                billion last year and has cut       centers around the country.             also be good for Laredo’s economy, Dominguez said.                       three highest annual salaries,
     80,000       because       some        historical trend of 10 percent         As a whole, the major            about      19,000       jobs.  A    Officials said the greatest              That’s because much of the fuel — 300,000 gallons of diesel each        multiplied by the number of
     workers took early retirement          to 12 percent growth by the                                                                                                                         month – along with the companies they use and supplies they buy          years they were employed as a
                                                                                 carriers cut about one-            spokesman said United has           need for workers was in
     or left voluntarily, according to      second half of the year.                                                                                                                            during replacement projects are local, Dominguez said.                   teacher, Moreno explained.
                                                                                 seventh of their flights, which    recalled 800 flight attendants.     Baltimore,       Chicago    and
     the Air Transport Association,           “They’re not really an                                                                                                                             “We are a big consumer in town,” Dominguez said. “We buy local.”          This is different from a defined
                                                                                 led to the massive layoffs.          Northwest        Airlines   cut   Oakland, Calif.                          (LMTBusiness writer Kelly Hildebrandt can be reached at 728-
     an industry trade group.               airline,”    Neidl     said     —    Very few of the laid-off           10,000 positions in October.                                                                                                                         contribution plan, which is
                                                                                                                                                                                                2547 or by e-mail at                                                                      SOURCE: Bureau of Labor Statistics

12         LMTBusiness Journal           February 25, 2002                                                                                                                                                                                                                                                                       LMTBusiness Journal      February 25, 2002

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