Top NY firms in crisis mode

The calamity which hit downtown Manhattan on Tuesday has caused the type of disruption to America's financial infrastructure …

The calamity which hit downtown Manhattan on Tuesday has caused the type of disruption to America's financial infrastructure of the sort which was anticipated for the Y2K bug but never happened - planes falling from the sky, telephone links breaking down and computers going blank.

No disaster planning however could have anticipated the indescribable grief and the psychological trauma of survivors who lost scores of their friends, fellow employees and top executives, and whose offices have been destroyed.

Some of the world's biggest financial giants are in a crisis mode which they could not have anticipated. Many top executives were left stranded at airports around the country as their corporate headquarters were destroyed and swallowed up in the collapse of the two towers. But the Y2K contingency planning in the run-up to January 1st, 2000, which included the construction of corporate bunkers, is helping firms cope with the crisis.

The contingency plans polished off 21 months ago are now being put into operation. Much of the data which is the lifeblood of the information economy can be retrieved. Most of the 350 companies based in the World Trade Centre maintained back-up systems in locations around the US such as Connecticut, Florida, Colorado and Texas. "The vast majority of our clients have multiple copies of data off site and on site," Mr James Simmons of SunGard data systems told the Wall Street Journal.

READ MORE

In Rosemont, Illinois, Comdisco Inc, a company that specialises in disaster aftermath, is providing facilities for firms whose premises have been destroyed. Executives can gain access to computers and other equipment at its 23 disaster centres set up throughout the US to recover electronic data following a disaster. The company has been contacted by 35 firms which were located in the twin towers and 2,500 employees from 30 companies have been transferred to Comdisco sites to begin retrieval operations and get business under way again.

Most of the World Trade Centre companies had extensive contingency planning, said Mr Rob Densen of OppenheimerFunds, whose 600 staff members in the towers have all been accounted for. OppenheimerFunds is moving its traders to a Comdisco centre in New Jersey where it will be able to recover trading positions and customer accounts from a back-up centre in Denver, Colorado.

Operations at Merrill Lynch, the world's largest brokerage firm whose 9,000 staff were evacuated from the partly-damaged World Financial Centre beside the World Trade Centre, have been transferred to a command centre elsewhere in Manhattan. This has enabled Merrill Lynch to continue its international trading throughout the crisis. Other companies like American Express have asked its employees to work from home but a big problem is the sporadic telephone service throughout Manhattan and in this crisis the e-mail has come into its own where it is connected to broadband.

The attack penetrated one of the most telecom-intensive areas in the world. One of the city's largest telecommunications facilities was destroyed when No 7 tower collapsed late on Tuesday, destroying 140 West Street which housed Verizon, the local telephone giant. Verizon has 500,000 telephone lines in the financial district and more than 6 million private or dedicated circuits for corporations. Power outages in the vicinity of 'ground zero' are also hampering telecommunications.

However quickly companies restore data and find new premises, some firms may never fully recover from the psychological blow and a number may just go out of business, shattered physically and emotionally.

Cantor Fitzgerald Partners, a major trader of Treasury bonds, was probably the worst-affected company. Some 800 of its worldwide workforce of 1,500 stocks, salespeople and traders were in its offices on the 101st and 103rd floor of one of the towers when the plane smashed into that level. Six hundred are unaccounted for. Two hundred were out of the office at the time. Chairman and chief executive Mr Howard Lutnick survived as he was dropping his son off to school when the plane slammed into the tower on Tuesday morning. One of those missing is Bill Meehan, chief marketing analyst and a well-known figure on Wall Street.

Marsh & McClennan, a financial services company, lost 700 of its staff. Morgan Stanley Dean Witter, the biggest company in the World Trade Centre, has been able to account for the "vast majority" of its 3,500 employees, according to chief executive Mr Philip Purcell. He said the company was operationally sound and ready to trade again when the stock and bond markets reopened. But it is left with a massive logistical problem, finding space to replicate the 1 million square feet it had rented over some 50 floors of the south tower.