LAFAYETTE, La. (Sept. 9, 2005)—On his journey home to New Orleans from an international trip, Delta World Tire Co. President Kevin Cates had no idea Hurricane Katrina was bearing down on his hometown and how much the storm would change his life.
Mr. Cates, realizing the seriousness of the storm when he turned on the news during an overnight stop on Aug. 27 in San Diego, called his wife Lisa and found that she and their children had evacuated to Lafayette, about 110 miles west of New Orleans. The following day, Mr. Cates flew to Houston where he met his family and stayed for a couple days and waited with many other New Orleans residents for the hurricane to blow over Louisiana.
“We had a lot of friends from New Orleans in Houston,” Mr. Cates said. “We were walking around the Galleria (mall) in Houston, and it was kind of like walking through our neighborhood.”
On Sept. 2, five of Delta World's 12 stores in the Gulf region were operating and Mr. Cates said he had heard from nearly all his employees at the affected stores except the New Orleans store. Mr. Cates estimated that 40 to 50 of the dealership's 100 employees were directly affected by the hurricane.
“We've talked to most of our key personnel,” he said. “We're very concerned about our New Orleans employees; the tire techs and mechanics who would typically not be the type of individuals who would evacuate…. But we've heard from all of our key employees on the Gulf Coast, and we have heard from some of our employees in the New Orleans store.”
About five to eight employees have not contacted Delta World, he said. To his knowledge, five employees have lost their homes.
By presstime on Sept. 8, Mr. Cates was able to visit his stores in suburban New Orleans and found them in good shape, with some roof damage and water damage caused by the hurricane's winds. The headquarters building in New Orleans parish is under water. The Picayune, La., store suffered some damage, but “I don't think it's too significant at this point,” he said.
Mr. Cates said his goal is to have the Metairie and Kenner, La., stores running on generator power within days and offer flat tire repair and some new tires to returning residents and rescue workers “as long as they don't kick us back out of the city.”
In Gulfport, Miss., Delta World's two stores did not operate for several days but were in “relatively decent shape,” Mr. Cates said, while the store in Pascagoula, Miss., suffered some damage. By Tire Business' press time, Mr. Cates said the four Mississippi stores were operating on a marginal basis fixing flats and offering basic tire work. Electricity was expected to be restored to the area within days.
Mr. Cates' brothers-in-law and co-owners of Delta World Tire, Ken and Paul Bernstein, also had evacuated New Orleans, and the three reunited in Lafayette to implement their business disaster recovery plan of relocating the dealership's headquarters to that town. Marvin Bernstein, Mr. Cates' father-in-law, has been staying with relatives in Orlando, Fla.
Paul Bernstein has “focused on the personal side” of the disaster, finding new homes for his and Mr. Cates' families in Lafayette, registering their children in the school district and helping store managers with their personal needs.
“We're just going to run the business out of Lafayette, and we have a tremendous support network here,” Mr. Cates noted. “We have the Broussard family, who has worked for us in this market for many years. We have a father and two sons who help run our stores in this market; they're just wonderful folks, and they've been helping us get settled and get our children enrolled in schools.”
Mr. Cates has concentrated on getting the stores operational again, particularly in assessing damage at the Mississippi stores and securing inventory there. A few key employees responsible for managing payroll, accounts payable and administrative tasks also have relocated to Lafayette.
During his return to suburban New Orleans to check up on his stores, Mr. Cates said his home was still standing—but with a pine tree on his porch and a branch that went through the roof into his son's room—but no flood damage. Everyone in the Bernstein family still had their homes, he said, except for Paul Bernstein, whose house was permanently damaged from flooding.
“We're the lucky ones,” Mr. Cates said of the aftermath. “We have a business now that we have to run, and we have jobs.”
The scope of the flooding and destruction brought to New Orleans by Hurricane Katrina did not surprise Mr. Cates. He said everyone knew that if the right storm came and hit the right place it would be disastrous to New Orleans, a city that sits 10 feet below sea level in some places. What has surprised Mr. Cates, and many Americans, is the slow rescue response.
“We're very disappointed in the response. It doesn't appear that the city was prepared to deal with the aftermath,” he said. “But at the same time, the city always said that what you need to do is leave because if you stay, we do not have the means to take care of you or evacuate you if it floods. Now that's easy to say to those who have the financial means to do that. That's harder to say to those who don't have the socioeconomic means to do that.”
Mr. Cates said he expects the next few months to be tough with the anticipated shrink in Delta World's business, but he said he also expects there will be plenty of work to do when the rebuilding begins in New Orleans and the Mississippi coastal towns. He said construction crews will need tire stores to repair and maintain the tires on their vehicles.
Meanwhile, dealer friends of Delta World within the tire industry have offered to employ temporarily some of its displaced workers who have lost everything and currently are in other states. Memphis, Tenn.-based dealer cooperative Del-Nat Tire Corp. is one of those that not only has offered employment help to Delta World's workers but also has sent personal computers and generators to help the dealership get its stores that lack power back on-line.
“Kevin's a stockholder who's invested in us, and we feel that he's family,” said Del-Nat President Ed Fabrizio. “Our hearts are broken. We think to some degree that they will not be able to return to New Orleans for a long, long time, if ever.”
Mr. Fabrizio added that Del-Nat will do everything it can to send Mr. Cates and the Bernsteins whatever they need. Already, he has been fielding daily calls from stockholders asking what can be done to help.
Mr. Cates said he has felt heartwarmed by the support, not only from Del-Nat, but also from his account representatives from Michelin North America Inc. who have called daily to offer support.
Another supplier he declined to name sent its truck to recover Delta World's inventory from the hard-hit Mississippi stores and transport it to a secure location.
“The independent tire dealer business is a wonderful place to be because we got that support,” Mr. Cates said.
He added that he's not sure what else he needs, but he mentioned that his children no longer have toys.
“We're strong folks and we'll deal with this,” he said. “We've dealt with this before and we'll be back.”