Southeast Missouri businesses have adjusted since the attacks

When Carolyn Kempf watched the second plane slam into the World Trade Center in New York on television the morning of Sept. 11, 2001, it never crossed her mind that this event happening across the country would devastate her business here in Cape Girardeau.

The phone at Elite Travel didn't ring more than three times that day. It was the calm before the storm, she said, as if everyone was watching television.

"Then they shut everything down and all hell broke loose," Kempf said. "It was unlike anything I had ever experienced in my life. The phones just started going and people were hysterical," she said.

The events of Sept. 11 occurred when the U.S. economy was already soft and many businesses across the country were already vulnerable. Some sectors of the economy, including travel and insurance, suffered great losses.

The New York Stock Exchange closed before trading started on Sept. 11 and remained closed until Sept. 17. When it reopened, the Dow Jones industrial average lost 684 points, the largest single-day drop on record.

The market's volatility was a direct reflection of the uncertainty felt by shellshocked investors and American consumers in general.

On Sept. 11, for the first time in history, civilian air travel in the U.S. was suspended completely for three days.

Travel in Crisis

Kempf's agency had a crisis plan in place, but it didn't quite fit this situation. Nothing like this had ever happened before.

Customers couldn't get through when they called airline or car rental customer service phone numbers. Their systems couldn't handle the overwhelming number of calls.

Local travel agents were able to help customers who couldn't get through, Kempf said.

They had federal officials who were in Missouri and needed to get to Washington D.C. immediately and also had customers who were stranded all over the world.

"We had all these people calling us who were not our customers asking us for help. We made the choice to try to help our clients first, but we did help people who were not our clients," Kempf said.

Her staff got creative. They booked people in rental cars, trains, even secured them space on transatlantic cargo ships.

Once those customers were taken care of the days and months that followed were filled by customers with future travel plans now filled with fear canceling their trips. Kempf said she believed people in the Midwest were more paralyzed with fear of travel than people on the coasts.

"We lost all of 2001's profits in refunds and we did not make money for three years," Kempf said. "I had to make a choice if this was the career I wanted to stay in. It certainly would have been easier to walk away."

Following the Sept. 11 terrorist attacks, Elite Travel went from having a staff of five, to having only one part-time employee and Kempf herself.

"I literally just sat there and wrote refunds for six or seven months. I couldn't pay anybody. I gave everybody's money back," she said.

The travel industry, and Kempf's own agency began an aggressive advertising campaign featuring the American flag and the theme, "Get Up, Get Out, Get Going," hoping to instill confidence that new airport security measures were ensuring travel was safe.

After Sept. 11, the U.S. Government took over airline security. Travelers had to show a photo ID, go through metal detectors and have their bags scanned. They could no longer give or sell their airline ticket to someone else.

"We tried to educate the public that if terrorists were allowed to captivate us by fear, they were taking away one of our greatest freedoms -- our ability to travel," Kempf said. "If you stay home, then the terrorists win."

Kempf herself did a lot of traveling after Sept. 11, even taking her children on airplane trips with her so she could relay her own experiences to her customers.

After about a year, she was able to begin adding staff back to her business and now she has a staff of 12.

The travel industry certainly wasn't the only sector of the economy impacted by the events of Sept. 11.

The U.S. insurance industry lost $40 billion, according to a 2002 congressional research report.

Some industries took proactive steps to thwart a loss in business after Sept. 11.

Car sales

Just one week after the terrorist attacks, General Motors launched its "Keep America Rolling" campaign, offering interest-free loans for up to 72 months on its 2001 and 2002 model cars. The name and imagery of the campaign drew upon the "Let's Roll" cry of Todd Beamer, a passenger on the hijacked United Airlines Flight 93, who led a group in a failed attempt to regain control of the plane from the hijackers.

Randy Ott, sales manager at Coad Chevrolet in Cape Girardeau, remembers the "Keep America Rolling" campaign well.

His first thoughts, when he'd heard about the Sept. 11 attacks, didn't have anything to do with the car business. But in the days following the attacks, the car business slowed down to a crawl.

"We had a week where we didn't sell anything," Ott said.

Keep America Rolling sent customers streaming into the showroom during September and October.

"It took a couple days, but people started coming in. Free money for six years brought a lot of people in," Ott said.

Both Ford and Daimler Chrysler offered similar zero percent financing offers following Sept. 11.

The GM promotion was initially scheduled to last six weeks, but its continued to be offered by car dealers at various times over the past 10 years.

"Once you put that out there, you can't draw it back. Typically, they will still put that on certain models and when that happens people are jumping to come in here for it," Ott said.

While car dealers were able to keep sales at normal levels with this incentive, many other businesses struggled in the aftermath of the Sept. 11 attacks.

Economic toll

The tragedy took a toll on what was at that time and already weakening economy. U.S. unemployment in September 2001 was 4.7 percent, by December, 2001, it rose to 5.4 percent, according to the U.S. Bureau of Labor Statistics. Unemployment stayed in the 4 to 5 percent range until the 2008-2009 recession. U.S. unemployment rose to 7.1 percent in December 2008 and has continued to climb. It was at 9.1 percent last month.

The nation's spending on the War on Terror, which began following the Sept. 11 terrorist attacks has no doubt affected the nation's economy. Businesses in the security and defense sector were amontg the few to see their profits grow following Sept. 11.

"Spending on the war on terrorism has run into the hundreds of billions of dollars, which has contributed greatly to our huge national debt," said Dr. Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University. "In retrospect, it was probably not a good idea to cut taxes in the face of two rather expensive wars."

World War II helped the country recover from a dismal depression after Pearl Harbor, but the wars in Afghanistan and Iraq have not had the same effect. While they do contribute to economic activity, this activity isn't anywhere near the level in previous wars.

"The spending is a rather small part of the economy today as compared to over half the economy being devoted to fighting World War II," Domazlicky said.

What the War on Terror has added to our deficits and national debt is unsustainable in the long run, he said.

"The sooner we can get out of Afghanistan and Iraq, the better it will be for our federal budget, and for the troops that have sacrificed so much for our safety," Domazlicky said.

mmiller@semissourian.com

388-3646