Power Poll ’02

An exclusive survey of Hawaii’s Top 250 executives.

August, 2002

This important election year has been marked by unpredictability.

BancWest Chairman and Chief Executive Officer Walter Dods became the big business buzzmaker after he ultimately announced that he would not run for governor. His brush with politics came about in June, just after Democratic frontrunner Jeremy Harris dropped out in late May.

In September’s primary election, the gubernatorial candidates and candidates for the Hawaii Legislature will be running against the backdrop of the 2002 legislative session – a session that was panned by most Top 250 executives in our survey. When asked to relate a positive outcome of the legislative session, Hawaiian Electric Industries Inc. Chairman, President and Chief Executive Officer Robert F. Clarke says succinctly, “I can’t really think of any. I guess that it ended.” Clarke just happens to head the largest company on Hawaii Business’ Top 250 listings for the 5th year in a row.

For the second Hawaii Business Power Poll ’02 (the first Power Poll ran in the May 2002 issue), Ward Research surveyed 143 top executives from Hawaii Business’ Top 250 companies from June 3 to 17, 2002, via phone and fax, to see what they thought about the legislative session and the gubernatorial race. The results paint a revealing picture of Hawaii’s business community. The Power Poll carries a margin of error of plus or minus 5.4 percent. Hawaii Business’ final Power Poll ’02 will run online at www.hawaiibusiness.cc in October 2002, between the primary and general elections.

QUESTION: Based on what you have heard or read, how would you rate the performance of this year’s Legislature in dealing with the issues facing Hawaii? Please use a 5-point scale where ‘1’ = “terrible” and ‘5’ = “excellent.”

“They have not done anything for business,” says one unidentified executive about this year’s legislators. In fact, on a scale of 1 to 5, with 1 being “terrible” and 5 being “excellent,” top managers who were surveyed overwhelmingly rated legislators a 1 (21 percent) or 2 (38 percent). This stands in contrast to a Ward Research poll of 500 Hawaii residents around the same time period, in which residents seem to be more pleased with their legislators. Thirty nine percent of the residents surveyed statewide gave the Legislature a 3.

HEI’s Clarke says he gave the Legislature a 1. “I think the bills that they passed with regard to gas price caps, control or regulation of HMSA and the like is just a bad way to go,” he says.

AIG Hawaii Insurance Co. Inc. Chief Executive Officer and President Robin Campaniano gave the Legislature a 2. Campaniano says, “I believe that a lot of the actions taken were actually nonactions, that even on an issue that they felt strongly about, they put such long deadlines on it that you will see no action on it for some time to come.”

Wayne De Luz, vice president and general manager for Hilo-Kona Mazda/Subaru and Linda Gilchrist, president of Island Insurance Co. Ltd., each rated the Legislature a 3. “Some legislation they passed was good, some that they should have passed, they didn’t,” De Luz says.

Gilchrist says, “I think that a lot of the activity that occurred in the legislature was taking money out of funds that are necessary and needed and putting it into the general fund and in the situations that I am the most familiar with, I have to question whether that was a reasonable and smart move to make. … I don’t think robbing Peter to pay Paul is the solution.”

QUESTION: “What would you say was the most positive outcome of the session for business in Hawaii?”

Three out of every 10 of the executives surveyed for the Power Poll say there was “no positive outcome” from the recent legislative session. Twenty seven percent say they don’t know of a positive outcome or refused to answer. Construction tax credits (12 percent) are the next-most-mentioned positive outcome. No new or increased taxes and the fact that the session ended were each mentioned by 7 percent of the executives.

“I can’t think of any positive outcomes,” says Robert F. Clarke, chairman, president and chief executive officer of Hawaiian Electric Industries Inc. “I guess that it ended.”

Another unidentified executive told Ward Research that one positive outcome was, “Tax break incentives that send a positive message that we are pro-business and pro-development.”

QUESTION: “What would you say was the least positive outcome of the session for business?”

The top executives in Hawaii picked the gas-price cap (23 percent) as the least positive legislative outcome for business in Hawaii. Another 22 percent didn’t know what outcome was least positive. Nine percent said nothing was done to help the economy, while another 9 percent said that capping medical insurance and premiums was the least positive.

Wayne De Luz, vice president and general manager for Hilo-Kona Mazda/Subaru says, “I would say probably no tax reform [was the least positive outcome]. It seems to be taking more and more of our positive dollars going into government vs. allowing us to invest it in the economy.”

Island Insurance Co. Ltd. President Linda Gilchrist says, “The issue of moving the funds back and forth. These things very often have long-term unintended consequences.”

Robin Campaniano, AIG Hawaii Insurance Co. Inc. chief executive officer and president, says, “The fact that they attempted to regulate in the name of consumers when, in actuality, their actions would not only hurt consumers, but hurt businesses as well.”

QUESTION: “In each of the industries below, please think about your expectations of sales activity in the next 12 months and indicate the level you expect alongside each.”

Top management is most optimistic toward real estate (57 percent expect either much higher or somewhat higher sales) and tourism (51 percent expect much higher or somewhat higher sales). Federal/military spending followed closely with 48 percent expecting much higher or somewhat higher sales.

Paul Molyneaux, project manager for ITT Industries Systems in Kekaha, which does operations and maintenance for the Pacific Missile Range Facility (PMRF) was one of the Top 250 executives surveyed. Molyneaux says, “I can’t speak for Oahu or the other islands, but I think in terms of Kauai and Barking Sands, I think we’re going to see a significant increase in military spending over the next few years.”

“We’re going to grow with the state of Hawaii’s economy,” says Hawaiian Electric Industries Inc. Chairman, President and Chief Executive Officer Robert Clarke of his conglomerate, which includes subsidiaries Hawaiian Electric Co. and American Savings Bank.

“So I would say it’s going to be modest growth.”

QUESTION: “Thinking about the election for governor this November, which candidate do you believe is the most committed to effecting the changes needed for a better business climate?”

If BancWest Chairman and Chief Executive Officer Walter Dods had decided to run, he may have made some dramatic changes to the Power Poll results. Hawaiian Electric Industries Inc. Chairman, President and Chief Executive Officer Robert Clarke says he selected Republican gubernatorial candidate Linda Lingle, but would have changed to Dods, had he been a candidate.

“I think Walter would be a terrific governor for a whole bunch of reasons,” says Clarke. “He did a great job for shareholders. He’s a very effective manager and a lot of the governor’s job is being the chief administrator for the state. He cares deeply about Hawaii and he’s not beholden to any particular status quo constituency. And I think he could be a real agent of change.”

The vast majority of the top managers who were surveyed picked Linda Lingle, as the gubernatorial candidate most committed to changes needed for a better business climate. In fact, the percentage that chose her jumped from 50 percent in March to 73 percent in June. The executives were polled a few days after Jeremy Harris announced he was withdrawing from the race and Lt. Gov. Mazie Hirono returned to the race. In March, 19 percent of the executives polled chose Harris, but as of June, without Harris as a choice, the executives who chose Lingle jumped by more than that.

“I said Lingle [in June],” says Island Insurance Co. Ltd. President Linda Gilchrist. “I think the positions that she has taken are considerate of business and I think they look at the economic future of the state. I think she realizes that we do have to go in and make some fairly drastic changes to improve the economy.”

The executives could also choose from three gubernatorial candidates running as Democrats. Thirteen percent of the top executives chose state Rep. Ed Case, 6 percent gave a nod to businessman D.G. “Andy” Anderson and 2 percent chose Hirono.

No Power Poll executives selected Republican candidate John Carroll or Natural Law Party candidate Jonathan Adler.

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