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Businesses prove nimble in Katrina recovery

NEW ORLEANS—Days after Hurricane Katrina ripped across the Gulf Coast and left this storied city a toxic swamp, defense contractor Northrop Grumman flew in more than 3,000 paychecks from Texas. Wal-Mart rushed mops and bottles of bleach to its stores across the Gulf Coast region. Hibernia Bank secured office space and apartments in a city seven hours away.

All show how nimble many businesses were in responding to Katrina.

Hibernia Bank is 135 years old, a venerable New Orleans financial institution. When it became clear that Katrina was no ordinary hurricane, the bank's emergency plan kicked in.

Some executives relocated to the state capital, Baton Rouge, and employees who deal with computer networks, record-keeping and other administrative chores were sent farther away, to Shreveport.

"The number one thing we did was to plan on how we would run the bank. A bank has to service its customers. Our goal was for our customers to have access to their money," said Harold Turner, an executive vice president.

Katrina affected 107 Hibernia branches; 47 had reopened within a week, and another 39 are expected to open soon. Twenty-one were severely damaged.

Days after Katrina's landfall, Shreveport became the bank's de facto headquarters. One employee had been pre-assigned to secure housing and office space, and the bank snapped up both in the confusing days after the storm. More than 200 employees, their families and pets are housed in Shreveport now, and another 200 families will be moved there.

"We rented every apartment we could find," Turner said, adding that the bank is securing more hotel rooms and office space than had been envisioned. Its emergency plan was for a short-term disaster, such as one week, not months.

"I don't think anyone would have anticipated the duration of this thing," he said.

Days after Katrina's landfall, the Baton Rouge office of Spherion, a national provider of temporary workers, rushed to find receptionists, file clerks and men with strong backs to move boxes and furniture. Companies that were fleeing devastation in New Orleans were setting up makeshift offices to tide them over. Spherion tapped the pool of arriving "relocated employees"—the term it uses for evacuees—to staff the new offices.

"We knew we were going to have an overrun in that area, and companies started placing orders," said Julie Dicharry-Quistgaard, Spherion's branch manager in Baton Rouge. "It's going to be months before they can get back into the city . . . a lot of companies are going to be here through the end of the year, maybe through the second quarter next year."

In Biloxi, Miss., The Sun Herald turned to a friend in Georgia, the Columbus Ledger-Enquirer, for help printing the daily newspaper and sending 20,000 copies back to the storm-ravaged region. Both are Knight Ridder newspapers. Human-resource officials from other Knight Ridder papers flew in to ensure that employees were paid and received emergency loans. The paper never missed a day.

Being nimble made Wal-Mart the world's largest retailer. Some 123 of its stores are in areas Katrina affected. Within a week, all but 18 had reopened.

"One reason we're trying to get them opened so fast is our customers are looking for Wal-Mart to get them through this," said Melissa O'Brien, a spokeswoman at Bentonville, Ark., company headquarters.

During hurricane season, the company puts a disaster contingency plan in effect, placing extra post-hurricane supplies—including mops, bleach, toiletries and diapers—at vital distribution points.

Northrop Grumman builds ships for the Coast Guard and Navy, employing about 20,000 workers in New Orleans and the Mississippi cities of Pascagoula and Gulfport. Within a week of Katrina, its Avondale shipyard outside New Orleans was ready to resume working, but lacked electricity because of the extensive damage to the area's power grid.

"A lot of people don't have a home, but over 700 people came to work," said Brian Cullins, a spokesman for the company's ship systems division.

Northrop Grumman cut paychecks in Houston and flew them to Katrina-affected workers in New Orleans and Pascagoula, making a deal with Western Union to get checks to employees who couldn't get to the facilities.

At least 4-in-10 Fortune 1000 companies, and a far greater percentage of smaller companies, lack sufficient disaster-recovery plans, said Roberta Witty, a business continuity expert in Stamford, Conn., for the Gartner Group, a research consultancy.

Even for companies with good plans, Katrina was unusual for the depth and breadth of damage.

"Normally with a disaster there is an assumption that something is in place and you are returning to a locale that's close," Witty said. "This is very, very different. You are going to lose your work force; they've got to find new homes. Think of the intellectual property that's being lost for companies."


(Adams reported from New Orleans, Hall from Washington.)


(c) 2005, Knight Ridder/Tribune Information Services.

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