Business Pace Slackens as War Comes to O.C.

Hotels reported fewer reservations, travel agents canceled trips and restaurants set tables that mostly sat empty. Car salesmen without many customers practiced their spiels on each other and retailers forlornly kept straightening the already neat shelves.

These were some of the signs that the Persian Gulf War had come to Orange County. In its opening days, the faraway conflict was having a generally dampening effect on the area’s already slumping economy.

Not all the news or business was bad. Visitors still filed through the turnstiles at Disneyland, map and book stores reported brisk sales of items relating to the Middle East and some fast-food restaurants said business was brisk.

But mostly local residents hunkered down, tuning in to their TVs and radios and poring over newspapers. Merchants and manufacturers from La Habra to San Clemente said that translated into empty tills and vacant showrooms, increased absenteeism and reduced productivity.

Still, economists said people are behaving much as expected and generally agreed that, aside from its human toll, the Persian Gulf War won’t have significant new impact on the local economy until after it ends.

The actual outbreak of hostilities this week is likely to keep spending down for a little while, said Mary Gilly, a consumer specialist at UC Irvine’s Graduate School of Business. “With an actual war going on, people will tend to cocoon.”

Joseph Wahed, chief economist for Wells Fargo Bank, said consumers have been paralyzed by uncertainty in the months leading to the war and aren’t sure yet what the onset of hostilities will mean. A short, decisive war lasting about a month or so would be “very good news” to business and the economy here, he said. A long one could have a negative impact.

Whatever the long-term impacts, what follows is a brief look at how some Orange County business have been affected thus far by the war.

Friday ordinarily is a good day to sell cars. And while the lunchtime traffic on Harbor Boulevard in Costa Mesa was busy, few buyers dropped in at Connell Chevrolet & Geo along the city’s automobile row.

But nothing has been ordinary at Connell for the last few months. First, people worried about a recession and then about war. For either reason, they have put off buying cars. Customer traffic is down by half in the last few months.

“This has probably been the most publicized war in the history of the world,” says general manager Paul Doddridge, 50, a soft-spoken man in short-sleeved shirt and tie, aviator glasses and a salt-and-pepper beard. “For the last few months, it’s been uppermost in everybody’s mind.

“No matter what you’re doing, the war eventually comes up in conversation.”

Jim Walders, 51, is a Fountain Valley contractor and one of Connell’s longtime customers. He dropped by Friday to make a truck payment. In a beard, shorts and a hat that says “Money for Nothing,” Walders chatted with Doddridge in his office right off the showroom floor about the war. Doddrige, with two sons in their 20s, is uncertain about the war. Walders is not.

“I don’t disagree with the demonstrators,” said Walders, a Vietnam veteran. “They’ve got a right to do it. And I don’t consider myself a hawk either, but I got to tell you as I watched the attack begin on TV the other night I could feel the pride welling up in me.

“We proved the people wrong who said we weren’t ready.”

Out in the lot, one of the dealership’s 110 employees washes each gleaming new car in a long line facing Harbor Boulevard and then moves on to the next. A few customers wander around under the warm sun.

Joe Kasper, 40, in a salesman’s Windbreaker, talks about how quiet the dealership has been the last few days and how the nearly instantaneous reporting of war news on TV and radio can affect customers from day to day.

Even the nine salesman on duty find plenty of time to duck into the customers’ lounge and watch the TV that’s always playing back there. “We get immediate feedback on the lot,” Kasper said. “Thursday the customers were up because the attack went well. Today they’re worried

because of the missiles hitting Israel.

“It’s a little bit like the stock market.”

At Worldview Travel in Costa Mesa, the seven travel agents--like many of their customers, they suspect--are glued to the agency’s four radios.

In the three days since the war began, the agency’s corporate travel business is way down. Yet with the country at war, many people are still making plans for cruises months from now.

It’s corporate America that’s worrying about terrorists as its employees fly hither and yon, says President Ricci Zukerman. One of her customers, for instance, just rented a car and drove here from Denver when his company forbade him to get on a plane. “It’s a lot likelier he’d be killed in a car accident after driving two days than by a terrorist all the way from Iraq,” Zukerman said. “The threats of terrorism are causing much more hysteria than need be.”

Zukerman may know whereof she speaks, since she has more than a passing familiarity with terrorists. An Israeli who holds dual citizenship, she spent three hours Thursday night with her husband trying to get a phone call through to his children in Israel. When they got through to them, they learned the family was awaiting a rocket attack.

“It does something to you to hear a child speaking through a gas mask,” she said.

Hawaii will probably get a lot busier in the next few months, she said, since Americans will probably vacation there rather than Europe because of the fears of terrorist retaliation for the attack on Iraq.

Meanwhile, her customers continue to have the jitters.

One businesswoman called after the war began and wanted to switch a flight that stopped in Chicago. “She said Chicago is a big city and if anything’s going to happen, it’ll be in a big city,” Zukerman said. When told it would cost $700 to change her flight, the woman decided to take the original flight.

The next day she called Zukerman to tell the travel agent there had been a bomb scare at the airport in Chicago. Her flight had been diverted. She had missed Chicago anyway.

A draft horse clip-clopped down the street, and Donald Duck, Goofy and Roger Rabbit pranced merrily among wide-eyed children as their parents snapped a few quick pictures. It was another idyllic day on Disneyland’s Main Street.

Yet even here, in a nostalgic dreamland where most talk is of popcorn, the length of lines into popular rides and restroom locations, there was no escaping the Persian Gulf War.

Given the seriousness of the world situation, Disneyland appeared to have near-normal off-season attendance Friday. The parking lot was about half-filled. Most of the visitors were Southern Californians who had come to take advantage of a sunny day and Disneyland’s temporary $20 entry fee.

A few tourists waiting on a bus bench after a day at Disneyland said they were keeping abreast of the war but were not about to let it ruin their vacations. They said that they were able to escape their troubles inside the park.

“It was real good yesterday,” said Michael Hoffman of Camano Island in Washington state, who had spent a second day at Disneyland. “By the time I was leaving, my face hurt from laughing and grinning so much. I walked into the hotel room, turned on the TV and it all dissolved.”

Larry and Eileen Grendus of Abbotsford, British Columbia, called the war a “scary situation,” and they indicated they were worried about a terrorist attack at public places, such as Disneyland.

David Helgenson of Seattle said, “It’s pretty hard to escape what’s going on.”

At the Pan Pacific Hotel, across the street from Disneyland in Anaheim, a hotel executive says there have been cancellations but nothing too worrisome yet.

“It’s a matter of a room here, two rooms over there, some no-shows, that type of thing,” said the executive, who asked that he not be named.

The 500-room hotel caters to both tourists and business travelers, and it seems to be mostly business travelers at this point who are canceling. The reason: Their companies want them to stay off airplanes because of fears of terrorism.

“I’m told companies are circulating memos saying don’t travel right now unless you really have to,” the executive said. “The reason is obvious. They don’t know how much capacity that guy (Saddam Hussein) has to extend his arm over here.”

One market where the effects of this caution may be most pronounced, the executive said, is Japanese business people who frequently travel to the United States.

When Mohammad Jamal croons in Arabic at his Anaheim restaurant, his admirers say he can charm even his enemies. But these days, Jamal is singing the blues. The Persian Gulf War has been devastating to business at the Gondole, a favorite watering hole among the Arab community in Orange and Los Angeles counties.

Jamal, whose face looks tired and drawn, said he’s had many sleepless nights since the Iraqi occupation of Kuwait on Aug. 2. Business dropped in half after the invasion, he said, and had just begun to recover before the U.S.-led multinational force battered Iraq on Wednesday.

Now, his mostly Arab patrons have completely deserted his restaurant, and costs are mounting. Jamal, though, must still pay his musicians, waiters and belly dancers who show up for work.

“I think people are staying home watching television and are afraid to gather in Arabic places because of rumors that somebody plans to blow up places where Arab-Americans gather,” he said, nervously puffing a cigarette. “As a precaution, I have taken the Arabic signs from my door. Still, no patrons came.”

For the first time in seven years, Jamal is thinking about temporarily closing his restaurant unless the situation in the Middle East improves.

Some other local restaurants reported that business was normal to slower than usual. However, some restaurants said takeout business is way up.

At Marie Callender’s Restaurant in Costa Mesa, food-to-go sales doubled from $190 a day to $385 since Wednesday, said Doris Smith, general manager.

Ken Varellas, general manager of a Pizza Hut restaurant in Anaheim, said takeout orders are up 30% in the last few days.

“People are staying home, watching TV and are ordering more takeout,” Varellas said.

James Edwards, president of Edwards Cinemas, the 241-screen theater chain based in Newport Beach, said Southern California business is down 15% since Wednesday.

One movie that’s doing good business, however, is “Not Without My Daughter,” a movie featuring actress Sally Fields as an American woman trapped with her daughter in Iran.

“I guess the film is closer to home because of the U.S.-Iraq war,” said Joe Zazzaro, manager of Edwards South Coast Plaza Theatres in Costa Mesa. Video movie rentals are down slightly this week, said Joe Francia, manager of Blockbuster Video in Santa Ana. “You can hardly get anything on TV but the war news, so you would think people would be coming in to rent videos,” he said. “I guess people are watching the war news.”

Times staff writers Cristina Lee and Chris Woodyard, and free-lance writer Anne Michaud contributed to this report.