Wednesday, September 15, 1999
Bank of Hawaii adapts
to changing economyThe issue: Hawaii's largest bank announces layoffs and restructuring.IT is no surprise that years of weakness in Hawaii's economy have affected the state's largest bank. The announcement by Pacific Century Financial Corp., parent of Bank of Hawaii, that it is eliminating more than 1,000 positions and laying off 266 employees -- 5 percent of its work force -- amounts to a measured reaction to adverse economic conditions.
Our view: The bank is adapting to new economic conditions and should emerge from the changes better able to compete.
Some of the employees scheduled to be laid off may be offered other positions in the company. Most of the 1,000-plus positions to be eliminated are vacant or will be.
The bank maintains that it is not simply cutting back; it is reshaping its operations to deal with the realities of contemporary life -- such as banking through the Internet and by telephone. It's obvious that advances in technology have improved banking efficiency and require fewer people to perform the same amount of work.
As Pacific Century chairman Lawrence Johnson put it, the bank and other Hawaii institutions have to adopt modern methods in order to survive. The bank could emerge from this process stronger and better able to compete.
Bank of Hawaii's announcement is the latest in a series of blows to Hawaii's economic confidence, following the closing of most of the state's sugar plantations and Liberty House's filing for bankruptcy. But there are some signs that a turnaround may be in the offing as Japan's long-awaited economic recovery seems to be happening.
It is a truism that the one constant is change. Hawaii has to adapt to a changing world, as it has many times in the past. Business is trying. Government must, too.
North KoreaThe issue: North Korea has promised to freeze testing of long-range missiles in return for lifting of some economic sanctions.NORTH Korea has a history of making threats that could produce an international crisis, then pulling back from the brink when it has won concessions. This appears to be the case once again with the declaration that Pyongyang has pledged to freeze testing of its long-range missiles.
Our view: North Korea has again employed blackmail to win concessions.
In return, says the State Department, Secretary of State Madeleine Albright will recommend the lifting of restrictions on trade with North Korea in some "nonsensitive goods," on some investments and financial transactions. North Korea is listed as a sponsor of terrorism and is therefore ineligible for U.S. arms sales.
The recommendation can be considered approved. Recommendations by the secretary of state to the president, particularly on such a sensitive issue, are not made public if there is any doubt of their acceptance.
Thus North Korea, by threatening another test launch of a long-range missile, has won another concession -- partial lifting of U.S. economic sanctions, at least temporarily. Similarly, in 1994 in returning for a pledge to freeze nuclear weapons development, it got a pledge of two light-water nuclear reactors, which do not produce weapons-quality plutonium, and oil shipments.
The Communist regime alarmed the Japanese last year by test-firing a missile over the main Japanese island into the Pacific -- clear evidence that North Korea was capable of attacking their nation. Preparations were reportedly under way for another firing despite warnings from the United States and other governments.
Once again, North Korea's blackmail has worked. The White House national security adviser, Samuel Berger, said Pyongyang's pledge deserved to be rewarded.
Whether it was deserved or not may be debated. It might be more accurate to say that the U.S. felt it had to deal with the problem with promises as well as threats. The question now is what the North Koreans will try next.
Bishop trusteesThe issue: The state attorney general's office has proposed that trustees of the Bishop Estate be appointed by the judges of the Intermediate Court of Appeals.AFTER all the problems with Bishop Estate trustees appointed by the Supreme Court justices, it's hard to believe that the attorney general's office is recommending that future trustees be appointed by the judges of the Intermediate Court of Appeals.
Our view: The appointments should be made by the Probate Court on the basis of recommendations by a committee composed of alumni, teachers and parents of students at the Kamehameha Schools.
As Randall Roth, one of the leading critics of the recently removed trustees, put it, this proposal would merely transfer the problem from the Supreme Court to a lower court. The need is to remove the judges from the appointment process altogether to remove the taint of politics.
This is for the benefit of the judiciary as well as the Bishop Estate. All but one of the current Supreme Court justices have announced they will refuse to make such appointments in the future -- in effect acknowledging the reality of the problem.
The interim trustees have proposed a selection committee including alumni, teachers and parents of students at the Kamehameha Schools to screen candidates for trustee. The Probate Court would make the selection from a list provided by the committee.
This would assign the preliminary selection to the people who are most concerned with the education of Hawaiian children, which is the mission of the Bishop Estate.
Let's keep the judges out of it.
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