Small Business Small business group touts Bush

World Transport Authority Vehicles Out for a Spin in



Colombia, the Philippines

The energy crisis is bad for small businesses in California and throughout the nation.

But it could be much worse. So said Karen Kerrigan, founder and chairman of the Small Business Survival Center, a Washington, D.C.-based advisory group.

California firms face sharp increases in energy costs and other expenses as the economy slows. For companies on already-tight margins, it could mean the difference between making a profit and having to shut down, she said.

Energy price hikes have even spread beyond California’s borders. While other states will not experience rolling blackouts, higher energy costs are on the way or have already arrived there, Kerrigan said.

There also are other energy challenges. Gasoline prices may rise in June, while there hasn’t been enough rainfall in the Northwest to power hydroelectric dams, she said.

But President George W. Bush’s energy plan may help reverse the trend. His plan calls for increasing domestic supply to reduce the country’s dependency on foreign oil, she said.

This stands in sharp contrast to former President Bill Clinton’s policies, which led to a 17 percent decrease in U.S. oil production since 1992, while consumption went up 14 percent, she said.

Bush also suspended measures placing draconian caps on carbon dioxide emissions. Inspired by the 1997 Kyoto treaty , which Kerrigan noted was rejected by the Senate on a 95-0 vote , these rules would have required the United States to cut carbon dioxide to 1990 levels, forcing consumers and businesses to cut energy consumption by nearly 40 percent.

Kerrigan credits Bush with increasing the nation’s energy options and reducing the energy load, which she called an important step toward a sound energy policy. Meanwhile, California’s “lousy electricity deregulation” and its reluctance to build new power plants over environmental concerns is “a good model of what not to do,” she said.

Kerrigan added she hoped politicians learn from this mess, since healthy economic growth depends on affordable energy.

“Small businesses are counting on a reasoned approach toward increasing energy options. Limiting those options through pointless regulation will only increase the cost of energy and limit its availability,” she said.

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Make Vroom!:

A local car manufacturer announced it has received its first royalty payment for the production and sale of its vehicles overseas.

Santee-based World Transport Authority announced April 25 that its licensees in the Philippines and Colombia have sold their first WorldStar utility vehicles.

These payments , from Philippines-based CBN WorldStar, Inc., and from Colombia-based WorldStar Andino, are the earliest phases in World Transport Authority’s marketing plan to produce WorldStars in developing countries. This is on top of earlier payments for the licenses, said Susan Browne, a spokeswoman for WTA.

Amounts of the payments have not yet been disclosed, but will be made available in the company’s 10-Q filing with the Securities and Exchange Commission, due to be released May 15, she said.

CBN manufactures the WorldStar vehicles in a pickup truck style. Andino’s sub-licensee, WorldStar Paez, recently announced the sale of 60 refrigerated trucks to Suiza, a Colombian cold-meats group, Browne said.

Lyle Wardrop, CEO and president of WTA, said these purchases strongly affirm the flexibility of the WorldStar design. Working from the basic configuration, the licensees were able to quickly and easily convert it to a refrigerated unit meeting Suiza’s specifications, she said.

The Philippines and Colombia factories are the first WTA manufacturing plants in operation. WTA is looking forward to additional revenue from these plants, as well as revenue from other licensee plants starting up operation throughout the globe, Browne said.

Unlike conventional car manufacturers, WTA does not build cars to sell overseas. Instead, it sells the factories that allow developing countries to manufacture the vehicles themselves, she said.

The approach avoids heavy import duties while allowing Third World nations to rely on local labor to cheaply build rugged utility vehicles needed for development, she said.

Browne predicted that the WorldStar, designed for heretofore underserved markets, could have the same economic impact on developing nations as the Ford Model T had for the United States and the Volkswagen Beetle had in Europe.

Consumers Wary:

Most consumers are somewhat cautious, but not greatly concerned about their discretionary spending this year.

According to the 2001 American Express Retail Index on everyday spending, 53 percent of consumers said they planned to spend about the same on discretionary items as last year, while 20 percent said they plan to spend less. The remainder said they plan to spend more.

The average American household also expects that their fixed household expenses will rise by about 13 percent this year, said Joanne Fisher, a spokeswoman for American Express.

The American Express Retail Index is based on a random, national survey of 805 adults with a major credit card. The survey looked at how they spend and manage their money.

According to the survey, Americans will spend an average of $9,312 this year on discretionary items such as dining out, birthday and holiday gifts, home decorating, entertainment and cellular phone service, Fisher said.

The survey also said that Americans expect fixed household expenses to rise this year to $23,545, up from $20,885 in 2000. Fixed expenses include groceries, utilities, telephone service, car payments, gasoline, Auto Insurance, medical bills and taxes, Fisher said.

To submit an item for the Small Business and Retail Column, please contact Zion at (858) 277-6359, Ext. 112. The deadline for the May 21 issue is May 11.