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>>> Coming up next on "Arizona
Horizon," the justice department
says not so fast to U.S.
airways-American Airlines
merger.
>>> Arizona's speaker of the
house discusses a denial of
federal aid for the Yarnell Hill
fire area.
>>> And we'll hear about a
shortage of construction workers
in the state.
>>> Those stories next, on
"Arizona Horizon."
>> "Arizona Horizon" is made
possible by contributions from
the friends of eight.
Members of your Arizona PBS
station.
Thank you.
>> Good evening, and welcome to
"Arizona Horizon."
I'm Ted Simons.
>>> The justice department today
filed an antitrust lawsuit to
block Tempe-based U.S. Airways'
merger with American Airlines.
Joining us now is Robert
Mittelstaedt, he's an airline
industry expert and the former
dean of ASU's W.P. Carey School
of Business.
Good to see you again.
>> Nice to be back, Ted.
>> All right.
This action by the justice
department a surprise to you?
>> It was a surprise to a lot of
people.
Previous airline mergers teamed
to --
Seemed to have gone pretty
smoothly without much objection.
>> What happened?
We had delta and Northwest going
through no problems,
united-continental, relatively
no problems.
Big problems here?
What's the difference?
>> Well, depending on how the
process plays out, there could
be significant problems.
I think what's behind this is
two things.
One, people beginning to ask
when is a small number of
airlines too few for competitive
purposes?
And so you hear it by saying
we're going from four to three,
we're really going from five to
four because southwest is a big
player as well.
Domestically, not international
like the others.
And so that's one of the
questions that's being asked
legitimately.
I think --
The cynic in me says the other
reasons this probably affects
Washington Reagan airport more
than any other, and there's a
lot of politicians, Washington
people that say, oh, my gosh,
this is our home airport, we've
got to worry about this.
>> We had on you last time
discussing the fact the merger
had been approved by all parties
that were --
Most parties, you mentioned that
there might be a sticking point
there at Reagan gnarl in D.C.,
and that is one of the sticking
points it sounds like
duplicating routes is a big
factor here.
Correct?
>> Yes and no.
There are not a lot of routes
that they compete on directly.
In fact, out of Washington, I
talked to a friend in North
Carolina earlier today who told
me he saw something in the paper
there, there are only two routes
American and U.S. air have
exclusively, one is from
Washington to Raleigh Durham.
Those two routes, whatever they
are, will be suspect certainly.
But the whole system fits
together pretty nicely in terms
of not overlapping.
This GAO study came out where
they said, but if you consider
connections, it's over 1600
routes they compete on.
Well, connections yes and no.
Just because we have family in
New Orleans we do back and forth
there from time to time, you can
get there on U.S. air but you
have to change flights in
Charlotte to get to New Orleans.
So I don't consider that really
competitive with American where
you change flights in Dallas to
get to New Orleans, because you
are going to fly an hour farther
each way.
Some some --
So some of the information
coming out here looks to be
pretty shallow in terms of the
depth of analysis that's taking
place in terms of the
competitiveness between these
two companies.
>> That same study would say
competition would be reduced
because of the connecting
services, the overlapping and
connecting services, competition
reduced in 38 states, you're not
necessarily buying that?
>> I'm not buying that.
It depends on whether you want
to connect in Montana to go to
Miami or not.
>> Well, OK.
The feds are basically saying
eliminates competition, puts
consumers at risk of higher
prices, puts consumers at risk
of reduced services.
Are these valid concerns?
>> I think an awful lot of this
is conjecture based on somebody
saying, I think this is what
will happen in the future.
Rather than any hard evidence
that anything like this is going
to take place.
The point that I keep coming
back to is that airfares in this
country are a bargain compared
to what they have ever been in
the history of the world.
Especially if you go back to the
prederegulation days.
We literally are paying maybe
20% of what we paid 30 years ago
to fly.
And an airfare from the east to
West Coast today costs you less
than you might pay for your
first couple of nights in the
hotel when you get there.
So it's not that --
An absolute sense there's a
problem, and I think that going
three major airlines competing
hard with each other, to get
people into their international
routes, I don't think you're
going lessen competition.
>> That's the big question.
If prices are what they are now,
and you see that as one of the
best bargains in the history of
airfare, does that get
compromised with this one more
merger?
>> I don't think it will.
But the problem is, that's all
conjecture.
Regardless of which side of the
argument that you're on.
There are laws against
collusion, all sorts of things,
but one of the examples people
use, all of the airlines
increased baggage fees, except
southwest.
And yes, if one of them tries it
and it works, the others will
try it too.
But that happens in any
industry.
That's not unique to the
airlines.
>> What happens next?
Are we going to get countersuits
from the airlines?
>> Well, they certainly will
fight the suit.
It's not yet a countersuit, but
the first step is that a judge
has to hear this, and decide
whether to grant an injunction
or not.
If they grant an injunction,
that stops it where it is, and
they plan to go to a trial.
And if it goes to a trial, it's
a judge trial, not a jury trial,
it still just goes on for some
period of time, and a judge has
to decide whether the damage to
the public at large is greater
than the advantages of such a
merger.
>> What kind of time frame are
we talking about here?
>> I just --
You just don't know.
There's a lot of stuff that can
go on.
They could get into negotiation
if the injunction is granted,
and it may get resolved before
it goes to trail, or --
Trial, or could it go to a
full-blown trial.
>> How likely is it, as we stand
right now, that this merger
doesn't happen?
>> I think from a legal
standpoint, and this is --
This has political and economic
and personal things swirling all
around 90 terms of people's
preferences and their airport
and everything else, I think
it's just much more difficult to
project what's going to happen
here at this point.
But I think it gets to be 50/50,
because of all the factors at
work.
>> 50/50, that's interesting.
That's a far cry from what we've
been hearing.
>> It looked like a done deal.
>> No kidding.
Last question --
Let's say that there is no
merger.
What happens to both airlines?
>> Well, the reality is that
both airlines are competing
against much larger better
capitalized broader route
structures against delta and
united.
If they can't combine.
And if they can't combine, they
still have to fight to be able
to buy the best airplanes to
provide the highest level of
safety to provide training, all
these other things that are more
difficult to do as a smaller
player.
From a pure marketing
standpoint, it's harder to
attract the public.
You have to spent same marketing
dollars, even though you're a
smaller player.
I think it becomes a difficult
challenge for them going
forward.
I believe it would make --
The merger makes sense, but
there's a very complicated
process by which this is going
to get figured out.
>> Complicated indeed.
Good to have you.
Thanks for joining us.
>> Nice to see you again.
>>> We want to hear from you.
Submit your question, comments,
and concerns Via email at
arizonahorizon@asu.edu.
>>> The federal emergency
management agency has declined
to declare the Yarnell Hill fire
a major disaster.
This as the city of Prescott has
denied death benefits for many
of the firefighters killed in
the fire.
House speaker Andy Tobin is here
to address both of those
controversial and emotional
issues.
It's good to have you here.
>> Thanks for having me.
>> Let's start with FEMA.
The federal disaster aid for
Yarnell denied.
What are your thoughts?
>> Well, it's not just my
thoughts.
The minority leader of the house
Chad Campbell came out, and we
collectively today we went ahead
and wrote to the president and
said, please reconsider this.
This community lost 20% of their
structures.
I know this is a little town,
but these are taxpayers too.
And we've had other emergencies,
hurricane sandy, several of them
out there, that's taxpayer money
too going there.
For them they've waited so long,
and to say you don't qualify
seems almost intentional to me.
I have to admit I'm pretty
disappointed in the president,
I'm especially disappointed in
how long they took to get us
here, and I'm respect --
I respectfully request they help
us again.
Take a look at this.
I've got 30 something percent of
these people under the poverty
line anyway.
We don't need all their help.
This is just a little hands up
to some few folks.
And I think it was a snub right
at Arizona directly at us.
>> FEMA's response was that the
severity and magnitude of the
fire was not enough.
>> Well, I would share with you,
if that's the place, why did it
take them a month to do it?
I would also share with you, if
that's their status, every rural
community in the country should
be nervous about whether they're
ever going to get support from
the federal government.
>> Do you think that's a factor,
the rural-urban --
>> yeah, absolutely.
There's not a lot of people in
that town, the sheriff evacuated
that town so quickly, I was down
there that Saturday night,
Sunday night, it was a very
difficult time, very difficult
event.
We watched in the darkness as
you can watch these propane
tanks, it was the only thing you
could see by it was so dark.
It's surreal.
This was a hurricane sandy to
those people who don't have
their home.
This was a hurricane sandy to
those people who have nothing
now.
And there weren't very many of
them that didn't have insurance
or many that were underinsured,
there's going to be some
problems with of course getting
up to code, things like that.
But Arizonans are strong, we'll
be fine.
But to treat them this way is
just beyond call.
>> Where would the money have
gone?
>> Well, what FEMA does, would
it have allowed federal people
to help with --
First off, loans.
To help those who are
struggling.
And for those who are so under
the poverty line, there would be
grant money.
It's not like it's a whole lot
for each person.
But $38,000, that could help you
get the next step up.
And maybe you could get the loan
to move forward.
So the answer --
There wasn't going to be a whole
lot of money in it, but we've
got a water infrastructure
problem out there, the pipes are
old, they broke through this
fire crisis, and I have fire
trucks that are in difficult
way, it wasn't fire related, but
this is old equipment, we still
have a responsibility to help
these people get themselves to a
safety area.
And we have a helicopter pad
that can use help.
This community, they're not out
there begging.
They gist want what everybody
else gets.
>> The feds responded in the
letter saying that state and
local governments were capable
of this kind of help, and when
you mention how few people there
are and how little money it is,
it almost in some respects make
their argument, that you guys
can handle this.
>> But I would then argue there
are other --
We went back with billions of
dollars for hurricane sandy.
The answer is, we do have --
We have expanded our emergency
funding that we did this last
budget.
So we've already expanded it.
But the end of the day, these
are federal taxpayer, this is on
state lands, we get it.
But at the end of the day, these
folks have the same losses that
somebody else somewhere else in
the nation has.
So does that mean New Jersey and
the Tri-City area couldn't do
that?
Baling them out was a mistake?
I don't think so.
I think Arizonans were happy to
be part of helping build up the
East Coast again.
>> I've seen criticism saying
that these people should have
had insurance.
How do you respond to that?
Because some of these folks are
underinsured, or no insurance.
That's a pretty dangerous way to
live.
>> It's dangerous to live that
way, but when I mentioned how
many people below the poverty
line, that send as message.
These folks have paid off their
house, but they can't afford
insurance anymore, they're
struggling.
And the east --
The west side of the street is
gone.
It's gone.
There's some old, old
structures.
A lot of Yarnell was built on
some of these old tailings, so
you have infrastructure that's
bad, it might not about --
They might not have been able to
get insurance because they have
an old building.
It's going to happen.
Everybody isn't insured.
And everybody can't afford that.
And that's why you have
neighbors trying to help and the
Red Cross has been great, we
have had great response.
The president shouldn't have
snubbed his nose at us.
>> Last point, and that just
saying the president snubbing --
There's some who are saying that
it's hypocritical for Arizona
leaders who are so critical of
the government, and so critical
of federal in so many ways, now
saying, why not us, why not now?
Respond to that, please.
>> I'd be happy to respond to
it.
I want our federal dollars to
come back here.
But if you're not going to have
an emergencies theme applies to
everybody, don't have Arizonans
pay for everybody else's
emergency stuff.
That's my response.
I don't have a problem with the
government stepping in and
helping with infrastructure,
helping taxpayers, helping
Americans who have worked all
their lives to put their lives
back together.
We're a very generous nation,
very generous state.
But does that mean Arizona
shouldn't be at least asking,
hey, we should expect some help.
This is pretty much across the
board, this was a mistake of
theirs.
>> I want you to comment about
the death benefits for the
seasonal and temporary workers.
I'm hearing folks saying these
are seasonal, temporary workers,
they knew what they signed up
for.
And this is something that they
didn't expect.
But it was within the deal.
How did you --
>> it is weren't deal.
Here's the response.
The only way that many of these
smaller towns can have these
hotshots is if they have
permanent workers and they have
seasonal and part-timers around
them.
They can't afford it any other
way.
I get that.
We don't want to lose that.
But if at the end of the day you
are losing lives that are not
having their beneficiaries
compensated, I think it makes it
more difficult for to us
maintain some of these hotshot
crews.
Who are saving our homes all
across the state.
So I'm not saying Prescott made
any mistakes, I know what
everybody signed, I get it.
But this is an exceptional
situation.
19 people just don't die in our
fires every day.
The law is the law, we can put
attorneys down here and fight
every day about whether they
signed this or not.
But what's right is, is that if
you have folks who are fighting
on state land protecting your
home and mine, our families,
they should be treated, their
families should be treated the
same.
>> You're drafting legislation,
what will that call for and is
this seasonal and temporary
firefighters all seasonal and
temporary workers?
>> This has to do with anyone on
state land.
Anyone killed on state land
fighting --
First responders of any kind.
>> First responders.
>> that's exactly right.
There's three different bills.
One is to help the city of
Prescott, because they --
Those who were permanently
protected, and were on pensions,
the city of Prescott will have
liability going forward for
those families, they have to
contribute into that pool.
Well, I think we've missed it
somewhere along the line, we
should have some sort of blanket
catastrophic coverage for these
incidents that may occur down
the road.
So they're going to be
additionally hurt.
One bill helps the city, one
bill helps the beneficiaries as
we go forward.
We have to find a way to do,
that make sure we're not having
a problem with our gift clause.
And the other one has to do with
protecting that site where we
lost 19 firefighters.
>> A special session likely?
>> I don't know.
We'll have to --
Representative Justin Pearce is
anxious to start moving forward
and making sure we're dotting
the Is and crossing the Ts,
so I think when we're ready to
go we'll let the governor know
and the senate president has
been very supportive, and senate
democrats, house democrats,
house Republicans all seem to be
on board.
We're trying to find the right
way to go.
>> Very quickly --
Does the state need to look
again at the issue of municipal
employees working, doing
anything on state lands?
>> Well, I don't know what you
mean by that.
I don't know if we'd have to
look at it all over again.
>> In terms of protection,
benefits --
>> yeah.
Well, I'm just going to tell
you, if we're going to put
somebody on fire line and
they're risking their lives and
their families should know the
state of Arizona will take care
of them.
>> Speaker, thank you so much
for joining us.
We appreciate it.
>> Thanks for having me.
>>> Arizona's housing market is
heating up, but the state is now
facing a shortage of
construction workers.
For more we welcome David Jones,
president of the Arizona
construction association.
Thank you for being here.
>> Thank you for the invitation.
>> What is the state of the
construction industry right now,
here in Arizona?
>> We suffered greatly.
We along with the tourism
industry in this state, suffered
greatly during the recession.
We're now starting to see signs
coming back that there's
vitality, individuals are going
to work, we're starting to see
houses being built, lots being
purchased for future building.
And what we're finding is that
we don't have adequate skilled
labor work force for
construction.
Not only here in Arizona, but
throughout the country.
So it's not a case of going
elsewhere in the country to
bring people in.
>> Define a skilled
construction --
What kind of jobs are we talking
about?
>> Individuals that require a
specific skill such as plumbers,
electricians, brick Mason,
carpenters.
Roofers.
>> And we used to have enough of
these folks to go around in the
salad days, correct?
>> We had enough at the time,
but even during the peak there
was still a demand because our
market was white hot.
Arizona led the country as one
of the most rapid growing
states, so the appetite for
construction was huge.
>> What happened to those that
were here back then?
Where did they go?
>> We don't know.
We actually don't know.
We've lost around 208,000 jobs.
And during that period of time,
a lot of people have left, where
they have gone, we don't know,
whether it was neighboring
states.
But the fact of the matter is,
we're finding that they're just
not there.
>> Career changes for some you
think?
>> Very possibly what we're
suspecting is that individuals
that have been in construction
because it does modulate with
opportunitieses of going up and
down, that they've decided to
retrain themselves and find
other areas to work.
>> Impact of SB 1070 keeping
some away as well I imagine?
>> I've probably been asked that
question about 50 times.
I don't think it really, Ted,
would be fair to say 1070 was
exactly the silver bullet.
But I think it hit at the same
time went into effect at the
same time as the recession.
And I think the challenge will
be for Arizona as we lead the
recovery is, how welcome will
individuals feel coming back
here if they are a Hispanic or
Latino?
>> With that in mind, how much
would immigration reform as we
know it help?
>> Well, we think it would help
greatly.
We're disappointed that we're
seeing Congress address the
agriculture areas, but the fact
is, in this country the average
construction worker is 47 years
old.
51% of our infrastructure is in
need of repair, or replacement.
The youth of America is not as
interested as previous
generations in working with
their hands and minds.
>> I know some would say the
solution if you don't have
enough jobs, is to pay a higher
wage for those jobs and the
people will come.
Valid?
>> Not necessarily.
We took a survey not too long
ago within our association, and
I'm going back just prior to the
recession, and our average
annual was between 44 and 52,000
a year.
For some of the skilled crafts.
That, today, with demand that
will be coming up, there will be
a lot of overtime,
opportunities, operating
engineers, heavy equipment
operators would probably up in
the 60s, 65,000.
>> And I don't want to get too
far into the immigration
argument, but there was always
this argument Americans don't
want to do certain jobs, or
increasingly hesitant or
reluctant to do certain jobs.
Is that what we're talking about
here?
>> I think what we're talking
about, we have to go all the way
back to World War II, when
soldiers returned, they got the
Gi bill, they started to get
some education, some left the
family farms, and they went to
work at factories.
And then Americans came up with
this paradigm that you're going
to go to college and you're
going to get an education.
You're not going to work on the
farm, you're not going to work
in the factory.
And consequently, we end up with
a highly educated society but
we've lost the worker bees.
>> you've got to wonder if the
worker bees, if you make it more
attractive do they start buzzing
around?
>> I think it would require
training.
And I think that what we find in
a personality profile of
individuals working
construction, they'd like to
work outdoors, they're task
oriented, they like to see
things completed that they
built, and so we need to, as an
industry, enhance our image and
create some incentives.
>> I was going to say, education
and training has to be a factor.
>> It is.
>> What do you want to see done?
>> I think we need to look at a
realistic guest worker program.
We're not going to be able to
meet the needs, I don't think we
can train quick enough if we --
If we would go on a national
program of infrastructure
repair, that's going to serve
out and sap out the individuals
that would --
May work on residential
construction.
We looked at --
There are two projects coming up
in the valley, if we look at
west valley resort and casino,
we look at the project over in
Tempe, $600 million dollars
apiece for projected on those,
that's a roughly around 6,000
construction related jobs per
project.
So consequently, when those
projects break, it's going to be
a greater demand.
>> Last question --
Is there any sign that supply is
getting closer to demand when it
comes to construction workers as
we stand now?
>> No.
>> So it's not a good situation,
it's getting warriors.
>> It's getting worse.
We look at Canada, they're in
Ireland right now recruiting to
get Irish workers.
And the U.K. and the eastern
European country trying to get
workers.
>> Are you trying to get the
attention of lawmakers?
>> We are.
>> Any response?
>> No.
>> It's good we had on you.
Thanks for joining us.
>>> Wednesday on "Arizona
Horizon," world renowned
physicist Lawrence Krauss joins
us for his monthly discussion of
science issues.
>>> And we'll hear from an ASU
student who used his disability
to help develop a program for
helicopter pilots.
and 10:00 on the
next "Arizona Horizon."
>>> That many is it for now.
I'm Ted Simons.
Thank you so much for joining
us.
You have a great evening.
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