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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
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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 kelly@lmtonline.com) SOURCE: Bureau of Labor Statistics
12 LMTBusiness Journal February 25, 2002 LMTBusiness Journal February 25, 2002
