The MacNeil/Lehrer NewsHour

Intro JIM LEHRER: Good evening. Leading the news this Thursday, pilot error emerged as a possiblecause of the Detroit air tragedy. A Swiss court ordered Iran contra bank records turned over to U. S. investigators. And the United States emphatically turned down an Iranian proposal for a hostage swap. We'll have the details in our news summary in a moment. Judy Woodruff is in Washington tonight. Judy? JUDY WOODRUFF: After the news summary, the inquiry into this week's plane crash in Detroit is our lead focus. The government's chief investigator will join us for an update. Then, the Central American Peace Plan, a debate between Congressman Jack Kemp and former U. S. Ambassador Sol Linowitz. Next, economics correspondent Paul Solman has a report on one firm's move to become more productive. And finally, Mike Lupica on America's enduring love affair with baseball.News Summary LEHRER: The Detroit airliner crash may have been caused by pilot error. That possibility arose today after investigators found the pilots of the Northwest Airlines plane may not have lowered their wing flaps. The plane's flight recorder showed the flaps in a horizontal position, not lowered as they should have been to give the plane lift. The DC 9 crashed shortly after takeoff Sunday night from the Detroit Airport. Up to 158 people were killed. We'll be talking to the man in charge of the investigation about all of this right after the news summary. Judy? WOODRUFF: Investigators working on the Iran contra case got a boost today. The Supreme Court of Switzerland cleared the way for key bank records to be made available to them. The court unanimously threw out a set of appeals by three principal figures in the affair, retired Air Force General Richard Secord, Iranian born businessman Albert Hakim, and Manucher Ghorbanifar. The records could be an important element in the case that Special Prosecutor Lawrence Walsh is trying to build. On another aspect of the Iran contra story, the State Department today said that Secretary Shultz opposed a plan in 1984 to encourage South Africa to aid the Nicaraguan contras. That came in response to a New York Times story today alleging that Shultz was in on the planning for such aid. LEHRER: The speaker of the Iranian parliament proposed a hostage swap today and got a quick no answer from the United States. Hashemi Rafsanjani said on NBC his country does not approve of hostage taking. He said Iran would exert its influence to get Western hostages free in Lebanon if the United States would do the same to free Shiite Moslem prisoners being held in Israel and Kuwait. The offer drew this response from State Department Spokeswoman Phyllis Oakley.

PHYLLIS OAKLEY, State Dept. : Our response to Mr. Rafsanjani is, ''No deals. No release of the military equipment, no pressure on Israel to prisoners, no pressure on Kuwait to release prisoners'' Let me restate clearly again what our policy is. The United States will not make concessions to terrorists, nor will we ask other countries to do so. Making concessions only encourages additional acts of terrorism. We would like to note that Mr. Rafsanjani's remarks confirm what we have said all along. Iran has a great deal of influence over those holding the hostages in Lebanon. Iran should use this influence to secure the immediate and unconditional release of the hostages held in Lebanon, all of whom are innocent victims of terrorism. WOODRUFF: The U. S. escort of the Kuwait tanker convoy moving through the Persian Gulf was slowed down today by strong winds blowing desert sand. Visibility was reduced to about 800 yards, according to shipping sources,who said the convoy had just passed the halfway point of its 550 mile voyage when it came to a halt off the coast of Saudi Arabia. Also today, Iran declared the Gulf of Oman and the Strait of Hormuz, the gateway to the Gulf, free of mines, after it said its navy destroyed four of the underwater explosives. That announcement came a day after Iranian commandos in a highpowered dinghy fired on a Yugoslav freighter passing through the Gulf. LEHRER: The Central American foreign ministers held their first full day meeting on peace today. The San Salvador meeting is for the purpose of working out how to implement the regional peace plan signed by their presidents last week. They held their first session last night. One of the ministers said afterward he was optimistic about the progress to be made. The five Central American countries represented are El Salvador, Costa Rica, Guatemala, Honduras and Nicaragua. WOODRUFF: The more fluid a tampon absorbs, the higher the risk of toxic shock syndrome for the user. That is what researchers from the Centers for Disease Control concluded today in a study in the Journal of the American Medical Association. The CDC scientists and a journal editorial called for standardized labeling of actual absorbencies on all tampon packaging. The Centers for Disease Control also issued its new AIDS protection guidelines for health care workers today. The CDC advised doctors, nurses and other medical personnel to treat all patients as potentially infected with the AIDS virus, nd says that appropriate precautions, such as use of gloves, masks and goggles, should be taken any time contact with blood or other body fluids of any patient is anticipated. LEHRER: Finally in the news today, French divers have retrieved a valise containing gems, banknotes and other valuables from the wreckage of the Titanic. The great White Star liner sank in the North Atlantic in 1912 on its maiden voyage after striking an iceberg. The 1530 people who went down with the ship included some of the world's richest and most notable. Salvage operators said the valise was found by chance during a routine survey of the stern section, which is lying in 12,000 feet of water. WOODRUFF: That wraps up our summary of the day's news. Still to come on the NewsHour, a newsmaker interview with the chief investigator of the Detroit plane crash, a debate over the Central American peace proposal, a documentary report on making money the old fashioned way, and an essay on everybody's favorite summer sport. Pilot Error? LEHRER: We go first tonight to a newsmaker interview with the man in charge of finding out what caused the Detroit airliner tragedy. At least 158 people were killed in the Sunday night crash of Northwest Airlines flight 255. Today's major development is a report that the pilots had failed to lower their wing flaps before takeoff. Dr. John Lauber is heading the National Transportation Safety Board's investigation into the crash. I talked with him earlier this evening from Detroit. Dr. Lauber, welcome. What is the status of the knowledge now about the wing flaps? Dr. JOHN LAUBER, National Transportation Safety Board: Well, Jim, we're still trying to sort that information out. What we were able to report last night was preliminary data available to us from the flight data recorder, which did indicate that the flaps and slats were at the zero, or retracted, position. Now, there are some things which are in conflict with that. Had that been the case, for example, we should have heard on the cockpit voice recorder a takeoff configuration warning, and we did not hear such a warning on that. So there's some discrepancies that we have to resolve, and we're trying to do this working on that today by looking at an examination of the actual physical wreckage itself to see if we can identify witness marks and other information that will give us a definite answer to whether they were in fact up or down. LEHRER: What does the preliminary investigation of the debris of the wing indicate at this point? Dr. LAUBER: I don't have the results of that. The structure's people were in the process of doing that this afternoon. We have managed to locate most of the -- I think what are significant pieces of wreckage, and those have been laid out in approximately relative position on the hangar floor that we're working in. But until such time as we've had a chance to get a report from that group, I can't say where we are with it. LEHRER: You say there are some discrepancies. Are they the kinds of discrepancies that would mean that maybe the wing flaps had been lowered after all? Dr. LAUBER: Well, that's a possibility. And that's exactly what we have to determine. As I say, had the flaps not been lowered, we would have expected to hear a warning. We didn't. And we have to resolve that before we can really decide where we are with this. LEHRER: And so it could be that there may have been a faulty warning system. That's the thing you have to investigate, correct? Dr. LAUBER: That is precisely correct. And one of the things that we were able to recover -- a fair amount of the warnings lights and precautions lights from the cockpit area, we believe we will be able to do an analysis -- a filament analysis of those to determine which of those might have been illuminated at the time of impact and get some additional insight into the situation. LEHRER: So in addition to a warning -- what is that, a siren? There would have been a sound in the cockpit if the flaps had not been lowered? Is that right? Dr. LAUBER: Yes. Had the takeoff configuration computer -- basically looks at several different items, including parking brakes, spoilers, trim, and among other things flaps and slats, and if there is a discrepancy, it would enunciate that. It's a voice enunciator system, and it would say, ''Flaps,'' or ''Slats,'' or whatever would be appropriate. LEHRER: And in addition to that, if I understand what you're saying, there would also have been certain lights that would have lit up on the cockpit control panels -- is that right? Dr. LAUBER: That's correct. We would expect to see certain indications on the panel. LEHRER: All right, now, for discussion purposes, if it turns out that you're able to determine that the flaps in fact were not lowered, what does that say to you? Dr. LAUBER: Well, then we have to look into the entire situation as to why that might have been the case. Clearly, here we get into operating procedures, checklists, and other kinds of information. We also have to again address the question of whether or not if that was the situation, that was properly displayed to the flight group. LEHRER: Let's assume that -- we can't assume anything -- but if in fact, for whatever reason, the warnings didn't come on right, or they were ignored, or a mistake was made by the pilot, whatever, and the flaps in fact were not lowered, would that have been enough to have caused this tragedy? Dr. LAUBER: Well, that we're trying to determine through an analysis of the performance data of the aircraft. We have available to us from the manufacturer performance data which we should be able to basically put into a simulation program and assume certain configurations of the aircraft and set the appropriate weather and temperature and wind conditions, and be able to calculate what the predicted flight path would have been, and compare that with what we know to be the case. LEHRER: But isn't it -- the reason for lowering the flaps, doesn't that help lift off, and if the flaps had not been lowered, would that not be good reason for why the plane did not take off the way it should have, and in fact crash? Dr. LAUBER: Well, the effects of not using flaps would in general have been to increase the length of the takeoff roll. And would have had an effect on the initial climb and performance, yes. But the exact effect that would have had is a matter to be calculated, basically. LEHRER: But is it not fair to say that if it turns out that those flaps were not lowered that it is at least a prime suspect in being the cause of this crash? Dr. LAUBER: Right. In order to understand the performance profile that was actually obtained -- that is, the flight profile that was revealed or is coming out of the digital flight data recorder -- that is clearly critical in order to understanding that and explaining that profile. LEHRER: Now as far as the process of lowering the flap -- this is just a routine thing that is part of just taking off that every pilot is to do, and there is never any exception to this -- is that correct? Dr. LAUBER: Well, that's correct. Setting the flaps to the appropriate setting for takeoff would be part of the normal operating procedure. LEHRER: Is it possible -- have you ever heard in your experience investigating airline crashes -- and you've had quite a bit now -- that somebody forgets something as crucial as this? Dr. LAUBER: Yes. The instances of forgetting of that kind have occurred. Human error is one of the classic causes of accidents -- not just in aviation, but in all other systems as well. So it's possible, and that's why the system is designed with checks and balances and warning systems and backup systems in order to prevent that. LEHRER: So for this to have resulted in this tragedy, it would have had to have been not only human error on the part of the pilot, it would have to have been then compounded by mechanical error in the warning system. Is that correct? Dr. LAUBER: Well, that certainly is a possibility. And that also is consistent with previous accidents -- rarely are they the result of a single event. They usually involved multiple failures of one sort or another. LEHRER: But isn't that also a remarkable coincidence -- that you would have had two failures so basic at one time? Dr. LAUBER: Yeah, it always is remarkable, because of the combined probabilities that unfortunately it can and does happen. LEHRER: Well, doctor, finally, when do you think, sitting there now -- and I realize this is hard to say for sure -- but when do you believe you are going to have a final answer on this -- and if not this, what the cause was? Dr. LAUBER: Well, a final answer could be some time in coming. Even once we've been able to identify what the basic situation is here, we've still got a long ways to go in term of probing for the deeper causes that might be involved here in trying to identify the problem would be to stop at a superficial level here of analysis, and our goal is to try to uncover what the underlying problems are so that we can develop appropriate corrective actions. LEHRER: But the flaps question specifically, you should have an answer on that pretty soon -- right? Dr. LAUBER: We should be able to have a pretty good idea of whether or not they were in fact up or down and what their position was. I would hope even later today, if not within the next couple of days. LEHRER: Well, Dr. Lauber, thank you very much for being with us tonight from Detroit. Dr. LAUBER: You're welcome. Pursuing Peace WOODRUFF: We turn next tonight to the recent efforts to bring peace to Central America. The peace plan endorsed earlier this month by the leaders of five Central American countries has brought a shower of criticism from conservatives, and confusion within the Reagan Administration. The President's first reaction to the so called Arias plan was to welcome it. The U. S. would be as helpful as possible, he said. But Assistant Secretary of State Elliot Abrams said the plan was full of ambiguities and more a preliminary agreement than a final peace treaty. Mr. Reagan himself commented that he wanted to see U. S. aid to the contras fighting the government of Nicaragua, continue until a cease fire had occurred and democratization is underway. But the next day, White House Chief of Staff Howard Baker said perhaps the President might delay his request for aid if the Sandinistas negotiate and restore democratic principles. Vice President George Bush, on the other hand, who is running for President, said he would not leave the contras twisting in the wind. Reaction from conservatives in the media was even more severe. An editorial in the Wall Street Journal called the plan, ''Reagan Bay of Pigs,'' and ''a fiasco. '' New York Times columnist William Safire concluded, ''None of this would have happened if Ronald Reagan were alive. '' Joining us now to debate the peace effort are Republican congressman Jack Kemp, also running for President, who joins us from the studio in Chicago. And Sol Linowitz, a former ambassador to the Organization of American States, and a negotiator of the Panama Canal Treaty. Mr. Ambassador, why are you so enthusiastic about the Arias plan? SOL LINOWITZ, former Ambassador to OAS: I think they have a new opportunity now to move toward peace in Central America. The two plans that were issued about a week or so ago were dramatically important, because they opened up new opportunities. WOODRUFF: The first plan being the Reagan Wright plan. Amb. LINOWITZ: Issued by the President and Speaker Wright, exactly. Because in these two plans, both the United States and the Nicaraguans made concessions. The United States undertook to say that it would negotiate with the Sandinistas, and even though it was going to press for democracy and civil and other rights, it was nonetheless willing to accept the fact that it could deal with the Sandinistas without toppling. For their part, the Sandinistas for the first time undertook an international treaty to bind themselves to democratization. And with that as a point of departure, it seems to me there's a remarkable opportunity to move towards peace and the resolution of these problems and the beginning of democracy in Nicaragua. WOODRUFF: That being the case, Congressman Kemp, why are you so down on this plan? Rep. JACK KEMP, (R) NY: There's no teeth to the plan. I agree with Ambassador Linowitz -- the goal should be democracy in Nicaragua. That was the pledge that they made to the Organization of American States in 1979. They have failed to keep those pledges and promises. And really if there is a chance for peace with democracy in Nicaragua, it's only because the contras, or the freedom fighters, or the democratic resistance, has been succeeding in the field. That pressure on the Nicaragua Sandinista communist government has brought them closer to the table, and to call off aid at this vital moment is to take any teeth out of any possible cease fire that would bring about the reforms and the peace and the freedom that we want for Central America, as well as Nicaragua. WOODRUFF: Mr. Ambassador, does he have a point? Amb. LINOWITZ: There are two things to be said in answer to that. In the first place, we've got to recognize that it was the moral pressure of the other Central American countries that got the Sandinistas to the position they've reached now. For six years or more we have been supplying the contras with military aid. This has not brought the Sandinistas any closer to negotiation or agreement. Secondly, even if we accept the promise that the help to the contras has helped to bring the Sandinistas to the present position, we have always said that we were trying to build them to the point where they would sit down at the negotiating table and negotiate, agreeing to establish democracy. We are at that point. And it would seem to me therefore that we should go on from there. WOODRUFF: Let's take the second point that he made first, congressman. He's saying the Sandinistas are at the table, they are saying they're willing to negotiate. Why not take advantage of it? Rep. KEMP: Well, we should take advantage of it, and I don't mean to imply that we shouldn't. But nonetheless, they were at the table in 1979 with the OAS when they made pledges for democratic reforms, democratic elections, democratic civil rights for the press, the church, minorities. And none of those promises were kept. With all due respect to Ambassador Linowitz, I think it has been in part the pressure of the contras, and in part the collapse of the economy. But look, Amb. Linowitz, in my view has a flawed premise in his position -- which is simply this. There are two nonnegotiable goals for U. S. foreign policy in Central America. The first one is democracy. Full democracy. Democratic governments do not wage war on their neighbors, and they don't undermine their neighbors, so we need to force Nicaragua to keep their pledges to the OAS and begin those democratic reforms. But secondly, they need to remove the Soviet and Cuban equipment, military caches and electronic surveillance and troops that are in Nicaragua. It is not in our interest of the United States or Central America's interest to have a Soviet base on the isthmus of Central America, and that should be non negotiable. And I don't think that the Central American democracies should be speaking to the United States about the security interests of something that is overwhelmingly important to our hemisphere. WOODRUFF: What about this point that the Soviet influence, the Cuban role in Nicaragua -- the Arias plan, as I understand it, says nothing specifically about that. Amb. LINOWITZ: Not specifically, but it is not true that it doesn't deal with it. Article 7 of the Arias Plan calls for implementation of the agreements with reference to security, which were agreed to by Nicaragua in the contadora proposals. Therefore, what is called for under the Arias plan is the implementation of the agreements with reference to getting rid of the Soviets and the Cubans, cutting back on the equipment that they have, cutting down on the army. In short, that is called for as part of the procedures which will be followed out after there is implementation of the Arias plan. WOODRUFF: And do you think the Sandinistas will abide by this? Amb. LINOWITZ: Well, it seems to me we've got to find out. They've signed this agreement. And by the way, it's important to Congressman Kemp to recognize -- unlike the assertions to the OAS, what took place the other day in Guatemala is that in an international treaty for the first time, where the other Central American countries, Nicaragua bound itself, both to democratization and to doing these things in order to secure its security. Rep. KEMP: I would acknowledge the ambassador's point, that this is the first time that the Sandinistas have signed a so called international treaty promising democratic reforms. I'll acknowledge that. But a treaty, or a peace of paper, with the name of Daniel Ortega, a hard core Marxist Leninist, is not worth the paper it's written on any more than the peace treaty that Chamberlain made with Adolf Hitler in 1938 at Munich, or we made with Josef Stalin at Yalta after the war. WOODRUFF: So are you saying there's no point in putting any hope in this at all? There's no point in negotiating? Rep. KEMP: There's no point in putting our points on a piece of paper that can be dragged out, because the balance of power rests with a dictator -- he can stretch out the negotiations, he can let the contras wilt on the vine. And as soon as the contras are gone, he can go back to his belief in Marxist Leninism, which is antithetical to democratic development in Central America. I think we've got to have more than just a piece of paper. We should have the assistance to the freedom fighters that would put this type of pressure on them that would bring about the -- WOODRUFF: What about this pressure that the congressman keeps talking about? We should go ahead and vote a conditional aid to the contras as a threat to the Sandinistas? Amb. LINOWITZ: As soon as you do that, you completely disrupt and destroy the Arias plan. Because one of the essential ingredients which must be put into effect simultaneously with the progress in the others, is cessation of aid to the opposition both in Nicaragua and in El Salvador. And if we say we'll go along with the other provisions, but not that one, that immediately is going to mean that the plan is not going to go forward. So I think that's the heart of the matter. Rep. KEMP: That's very disappointing. Again, with all due respect to Amb. Linowitz, that just is at odds with the facts. The Soviets and the Cubans and Nicaragua are giving assistance to the guerillas in the field in El Salvador, and we certainly don't want the Duarte government to fall. But at the same time, we have to keep the pressure on the communist government in Managua. Else they will not keep the pledge, they will not make any reforms, and I want to make the point again -- that a Marxist Leninist client state of the Soviet Union in Central America is inimical to the interests of the other democracies in the surrounding area. There has to be a change. WOODRUFF: Mr. Ambassador? Amb. LINOWITZ: Can I just ask -- does that mean that Congressman Kemp is saying there is no agreement of any kind that he would be willing to support in Central America? Rep. KEMP: Very definitely there's an agreement I'd be willing to sign. Amb. LINOWITZ: With the Sandinistas? Rep. KEMP: Well, if the Sandinistas began their reforms towards democracy that they pledged to the OAS, and were willing to stop destabilizing their neighbor and got the Soviet military hardware and military surveillance equipment out of Nicaragua -- you bet. They won't do it, Sol, without aid to the freedom fighters. WOODRUFF: In other words, the Sandinistas would not be the Sandinistas, in other words. They would completely change their philosophy. Is that what you're saying? Rep. KEMP: Well, as I said, our unambiguous goal in Central America must be democracy for the Central American nations, including Nicaragua. Absent democracy, you're going to have a cancer. WOODRUFF: Let's talk specifics -- Mr. Ambassador, what are you willing to accept -- how far must the Sandinistas go to have a regime that is acceptable to the United States in your view? Amb. LINOWITZ: To live up to the provisions of the Arias proposal. If they do that, and I think that's what Congressman Kemp was saying, all the things he articulated are contained in the Arias proposal, if they really implement them, live up to these things about security, about democratization, about withdrawing their forces, about not threatening other countries, then as far as I'm concerned, they have shown enough good faith to justify our abiding by the agreement and working with them and in due course even trying to bring them back into the family of nations. WOODRUFF: All right. Congressman Kemp, what about that? What about doing that and waiting and delaying the request for contra aid until after the Sandinistas have had a chance to show their intention? Rep. KEMP: Because that is the pressure upon the communist government -- to force them to comply with those promises that they made to the OAS and to Arias -- or to the Arias Ortega plan. You won't get an agreement. They'll drag out the negotiations, they'll go for a cease fire, they may even open La Prensa. That is the way communists tactics work and has historically. I don't see them under our table, and I don't see them coming up to Texas. But I do know that the communists know how to negotiate and talk, and delay and solidify their position. They've done it at Yalta. They promised at Yalta democratic elections in Poland and Yugoslavia and Hungary and the Ukraine, and this is exactly the same tactic. WOODRUFF: Mr. Ambassador? Amb. LINOWITZ: Well, the point is really that Congressman Kemp is assuming that the reason why the Sandinistas have come to this agreement is because of the pressure from the contras. The facts don't justify that conclusion. The fact is that the contras were not the strong force that led the Sandinistas to make the arrangement with the Central American countries. It was their pressure on the Sandinista that did that. Moreover, we know that for six years, as I said earlier, despite all of the support we've given the contras, they have not been able to budge the Sandinistas towards the position which they have now undertaken. And I think we ought to be able to advance from that on the assumption, Jack, that even if everything you're saying is right, that you have pressured the Sandinistas to the point where today they're at the negotiating table, willing to undertake things they have never been willing to undertake before, and giving us a chance to test them. WOODRUFF: Congressman? Rep. KEMP: They're looking for breathing room, Sol, that's all they want. WOODRUFF: Let me ask you both to look ahead. Congressman Kemp, what do you think is going to happen here? Rep. KEMP: Well, I think first of all that the President by the end of September will acknowledge that there isn't much hope of getting not just a cease fire, but the type of reforms we all want in Nicaragua, and I think that he will make the request to the congress for aid for the freedom fighters sometime close to or after September 30. I'm deeply concerned that we have lost whatever momentum we might have had by the dramatic testimony of Ollie North during the Iran contra hearings. WOODRUFF: But what about the Arias plan, is it down the tubes? Rep. KEMP: How can anybody predict that? The Arias plan has a dangerous flaw that goes beyond anything that I have said so far, or even that Sol Linowitz has -- because it treat U. S. troops in Central America the same way it treats Soviet troops. WOODRUFF: Mr. Ambassador, what do you see happening? Do you see the plan having a chance or not? Amb. LINOWITZ: I think, I hope the administration will conclude that the Arias plan serves our interests. That we will work with the Central American countries to try to implement the proposals, to assure that we come up with an agreement which is going to take care of our security concerns and advance toward democratization and that in due course we will work together to implement these arrangements. And if they don't work, we will be free then to take such steps as we deem are necessary. WOODRUFF: All right, gentlemen, we thank you both. Ambassador Linowitz, Congressman Kemp. Thank you both. LEHRER: Still to come on the NewsHour tonight, Paul Solman on productivity and Mike Lupica on baseball. But first, this is pledge week on Public Television. We are taking a short break now so your Public Television Station can ask for your support. That support helps keep programs like this on the air. Temporary Workers LEHRER: For those stations not taking a pledge break, the NewsHour continues now with a business story, a booming business story, as told by Spencer Michels of Public Station KQED, San Francisco.

SPENCER MICHELS: The people in this room work for a temporary help agency, but it's a far cry from the old steno pool. The company is called Q Tech. It's the brain child of Chris Quackenbush, a Silicon Valley entrepreneur who has positioned herself at the top end of one of the fastest growing industries in the country, temporary work. CHRIS QUACKENBUSH, Q Tech: We have probably accomplished projects in almost every job category there is. We have people that are running mail rooms, we have people doing designing and drafting, and scanning and computerated design and computerated manufacturing projects. I really can't see anything that would be untouchable.

MICHELS: Since the 1983 recession, many corporations have kept very small staffs, using thousands of temporary workers to handle their fluctuating business. Ms. QUACKENBUSH: So these companies are starting to look at their marketplace and say, ''We've got to get lean and mean. We have to concentrate on our core business, and produce products cheaper, better and faster.

MICHELS: Agencies like Q Tech can take over recruiting, paying and laying off workers, among other management functions. They pay workers compensation and unemployment insurance, which their people use heavily between jobs. Their client companies can save a bundle on personnel costs. Chris Quackenbush claims the surge in temporary jobs is a boon to workers who dare to adopt a more adventurous lifestyle. Ms. QUACKENBUSH: In the past people haven't had the flexibility or taken the flexibility to take charge of their own life, their own careers. There may be some risk,and it depends entirely on the person's capabilities, the market they're in, the economy.

MICHELS: But workers from clerks to corporate executives aren't always as enthusiastic. JOE ROCKOM, Q Tech Employee: Like I said, my long term goal is not to be a contract employee. My long term goal is to find a full time position. But I've got to believe -- as a matter of fact, I know -- that there are a lot of people in my position out there that are willing to do contract work.

MICHELS: Joe Rockom worked 17 years for an electronics firm that laid him off. He was their Vice President of Finance. Today, he works as a temporary financial consultant through Q Tech while looking for permanent work as a Chief Financial Officer. On this day, Rockom is working for Mike Brieza at a company called Integrated Power Systems. Mr. ROCKOM [voice over]: He's a sales manager trying to keep track of some distributor inventory. So it's an area that I really wouldn't be interested in. Like I say, you never know, maybe his company may be looking for a CFO at some point in time, and he may know of it.

MICHELS: Most temporary jobs are still white collar office work. And while wages are going up, the workers with skills in demand, such as word processing, long term benefits, pensions, sick leaves, severance pay, seniority and job security all go by the wayside. Most temporary workers are not protected by collective bargaining laws, and cannot be unionized. So unions fear companies will hire a tiny permanent staff, but make the majority of jobs temporary, to strip the workers of bargaining power. GEORGE DAVIS, AFL CIO Local 1100: It gives them no way to object to anything the employer may want to do, or conditions of employment, other than to quit. I would predict that within the next five years that up to 40 to 60% of all clerical workers in the metropolitan cities are going to be working for temporary agencies.

MICHELS: Temps are big business, close to $7 billion a year nationwide, and growing. Nine out of ten companies use them. Large corporations may want to pick up 100 workers on a moment's notice, and let them go just as quickly. With the industry's boom, the number of agencies has skyrocketed. In California alone, nearly 800 agencies compete. These days they find themselves courting workers as well as clients. LEHRER: An update: Joe Rockom, the man who took a job as a temporary financial consultant is now the Chief Financial Officer for a California company and it's a permanent position. Making Dough WOODRUFF: Next tonight, a story about making dough the old fashioned way. For the past two years, our special business correspondent, Paul Solman, has also been lecturer Solman at the Harvard Business School, where he sometimes studied business practices through the eye of a documentary camera. His story tonight uses some of that material.

PAUL SOLMAN: This is a typical classroom at the Harvard Business School. Classes here are generally built around a case study. A write up sometimes, a video, of a real life business problem. Today's business problem concerns low productivity in the service sector. Generally, we divide up the economy into sectors, manufacturing, mining, agriculture, and everything else we dump into the service sector. Productivity is nothing more than output per worker. Number of cars produced for auto worker, tons of steel for steel worker, stuff like that. In manufacturing in the past few years, as machines have replaced people, productivity has risen dramatically. The problem is that productivity in the service sector has remained relatively flat. Now, put yourself in the manager's seat. And try to figure out if you can solve the productivity problem in the following, real life examples in the service sector. Au Bon Pain is a chain of fast food French cafes. Like any fast food chain, its work force is young and transient. Its customers are surprisingly diverse, given Au Bon Pain's yuppie image, its yuppie food. Starting in 1980, the firm began to take off. By 1985, sales had risen to $32 million a year. Viewed from the outside, the future looked bright. But in fact, two years ago, Au Bon Pain was in the midst of a productivity crisis. New York City's Rockefeller Center. October 25, 1985. Ron Shaich, the president of Au Bon Pain, the man on the right, is making one of his regular on site inspections. The man on the spot is one of his managers, Jim Rand. RON SHAICH, President, Au Bon Pain: You got some line here, huh, Jimmy? JIM RAND, Manager: Could be a problem with the cashier, maybe? Mr. SHAICH: I don't know. Why isn't there an order taker out here? Mr. RAND: I asked them to put one out here. I can get an answer for you. Mr. SHAICH: And? Mr. RAND: And -- they didn't put one out here. I don't know what -- I can ask why there's no order taker --

SOLMAN: Employees are missing, customers aren't being served. The boss is frustrated, and the inspection has barely begun. Mr. SHAICH: Look at this, Jimmy! Mr. RAND: I can tell you what the problem is -- they lost the keys.

SOLMAN: The president of the entire company is helping pick up towels in a New York City bathroom. Two days later, Cambridge, Massachusetts. Different city, different store, same problem. The individual store managers couldn't deliver. So the president and his district supervisors felt they had to impose the company's standards from above. Mr. SHAICH: What it forced us into was a top down kind of organization structure. I, and my top managers, spent most of our time running from store to store, putting our fingers in the dike, trying to keep this thing going. (to manager) What're we gonna do in here, Louis? I mean, this goes on here every night like this, doesn't it? LOUIS: Yep. I'm open for suggestions.

SOLMAN: Managing from the top town, Au Bon Pain was simply following the lead of firms like McDonald's which had been fabulously successful while imposing standards from on high. [film clip of McDonald's Training Tape] ACTRESS: Wash your hands up to the elbow.

SOLMAN: The objectives are service and productivity. [film clip] ACTOR: Welcome to McDonald's. May I help you, please?

SOLMAN: But how often have you been greeted this way in at fast food counter? If you're Ron Shaich trying to sell high quality rather than low price, typical fast food service would be fatal. If you continue to beat on your managers so that they in turn beat on the employees, then high turnover and poor service will be inevitable. So what's the alternative? For two years, Shaich and his business partners worked on a solution to their productivity problem. Executive Vice President Len Schlesinger argued against a nickel and dime approach to keeping good health. LEN SCHLESINGER: Because of you play the money game, all it's going to end up happening in this market is everybody is going to be driving up wages and people are going to start jumping for a nickel or a dime from one place to the next.

SOLMAN: So instead, the group came up with a radical proposal. They called it ''The Partner/Manager Program. '' Each individual floor manager would share almost 50/50 in individual store profits, and could pay employees whatever the manager thought they were worth. Mr. SCHLESINGER: The way we were going to get the best people was to pay them the most money possible. And partner/manager was our leverage vehicle to be able to do that.

SOLMAN: Twenty six year old Jim Morgan is Au Bon Pain's answer to the productivity crisis in the service sector. As the partner/manager here in Boston's Copley Place, he runs the store. The employees work for him. JIM MORGAN, Manager Au Bon Pain: It used to be if they did real well, they'd get a ten cent raise, and you'd flip the form over and check off which part they had -- maybe they made it all the way to fifteen cents. Now I'll give an employee a dollar an hour raise if I feel that they're worth it. And they really respond to the fact that they're working for me, and not for a Au Bon Pain.

SOLMAN: The key to the partner/manager concept is to bring the storekeeper mentality to the fast food business. Mr. SHAICH: A manager does a better job of delivering to that customer. What does that mean? It means quicker service. How does quicker service impact the sale in the store? We get more customers through that store. It's much like adding two lanes on a freeway. Our crew people, because they relate to that manager, because that manager is there pushing them and leading them on, our crew people are doing a better job for our customers. They're nicer to our customers, they're on the side of our customers. They're much more able to suggest to our customers. Mr. MORGAN: Have you had the new muffins yet? CUSTOMER: No, I haven't. What I was trying to do, actually is lose -- (unintelligible) -- absolutely delicious.

SOLMAN: It's well known in the restaurant business that above everything else, customers care about being recognized. Storekeepers, meanwhile, care about controlling costs. Mr. MORGAN: We gotta throw all these out.

SOLMAN: For example leftovers cost you extra to make and extra to throw out. Since each time you take the trash at Copley Place down to the dumpster, it cost the store six dollars. Mr. MORGAN: Used to be we'd just do unlimited trash taking out. Now we're very cautious, and we jump up and down in the trash and mash it down to make sure we're only taking out one six dollar shot each time we go down stairs. That's saved about $700 a month doing it that way. On the food cost, we track what we did yesterday, and follow the trends of what's going on with that so that we can bake just exactly what we need and try to reduce the leftovers, and that's a savings of anywhere up to $50 a day.

SOLMAN: Now, we have to admit to being a little devious during our interview with Jim Morgan. We brought him outside so that we could sneak in and videotape a key component of the partner/manager program. A visit from the mystery shopper. The corporation hires a New York firm to mystery shop every Au Bon Pain store every week. No one knows who or when it will be. But when the store doesn't measure up in terms of politeness, promptness, cleanliness, food quality, then the manager will soon be a partner no more. Jim Morgan is back behind the counter. The mystery shopper has finally made it to the front of the line. She's ordering a Tarragon Chicken Salad Sandwich, with a twist. MYSTERY SHOPPER: I want it on a croissant. What I'd like is on a chocolate croissant. CLERK: A chocolate croissant with chicken inside? MYSTERY SHOPPER: It's a little odd, I know.

SOLMAN: The chicken salad and chocolate combination should test the resiliency of any crew. No matter how weird you order, the customer will be served. As the mystery shopper prepares to sample the fare, we debriefed a pair of less mysterious patrons. What about the service? CUSTOMER: Real fast. You see yourself, that girl over there, she's smiling, says, ''Yes, come over here, I'll help you. '' They're real nice here. SOLMAN: Nicer than McDonald's, Burger King? CUSTOMER: Yeah.

SOLMAN: Outside the restaurant, the mystery shopper is finally grading Jim Morgan. She's been using the crossword puzzle as her cover. (to mystery shopper) How'd they do? KATE MATTIAS, Service Resources: Well, overall they did excellent. The only thing that they really made a mistake on was I had ordered a number of different items. And one of them, the chocolate croissant with the chicken tarragon salad, I had requested as a take out order. Everything else was supposed to be eaten in. And when I went over to the sandwich counter, and they gave me my order, they gave me everything in bags, as if I was taking the entire order out, which was the one really tactical mistake that they made, because I had requested that I was eating in.

SOLMAN: Well, they're probably not going to kick Jim Morgan out of the program for this. The real worry about partner/managers like Morgan is that working 70 hours or more a week, they won't be able to survive the pace. As Ron Shaich pointed out in the discussion of this case, to Harvard MBAs last winter, the program has accentuated both the strengths and weaknesses of free enterprise. Mr. SHAICH: So we had a system where there were very tight limits on the top, and a safety net on the bottom. We converted that into a system where the guys that are really good and can figure out better ways of getting things done against the output that we require, they can do phenomenally well, and the guys who don't do well? They fall right off the map.

SOLMAN: If this sounds somewhat brutal, well, it is. You may think of profit sharing as a way of creating a happy, harmonious team, but the more competitive the team, the fewer players make it. Mr. SHAICH: This is very Darwinian in nature. It is in fact those who produce the results get the gain. Those that don't produce the result don't get the gain.

SOLMAN: Meanwhile, back at Au Bon Pain, the new boss is in the counting room, counting out the money. Mr. MORGAN: This is the essence of manager/partner. Here's the profit. Here's Au Bon Pain's share, and there's my share. Before the program started, I would make, depending on the bonus system, anywhere from $31,500 to $32,500 and ten years from now under that system I might be making $33,500. And under this system, it's an open ended thing. I would be tremendously disappointed if I made under $50,000, and wouldn't be totally surprised to see making $90,000 to $100,000. Clearly, there'll be managers on this program that will be making well over $100,000 this year. SOLMAN: And you hope to be one of them? Mr. MORGAN: And I sure do hope to be one of them, that's right. Diamonds are Forever LEHRER: Finally tonight, a love poem to the game of baseball. The poet lover is our sports essayist Mike Lupica of the New York Daily News.

MIKE LUPICA: In describing George Babbitt, Sinclair Lewis wrote, ''A sensational event was changing from the brown suit to the gray the content of his pockets. He was earnest about these objects. They were of eternal importance, like baseball. '' Now, I don't know what things were in George Babbitt's pockets, but if they're as important as baseball, they must have been made of gold. Someone once said that to understand America, you must understand baseball. I don't know about that. I just know that if you understand baseball and love it, of course, you're lucky. There's never been a better game. My theory's always been that England, say, is a very nice country. But there's no baseball there. So who'd want to live there? There is beauty in the game of baseball. To me, the singular confrontation in sports is the one between pitcher and batter. We get that over 200 times a game. No matter what the score in a game, no matter how meaningful or meaningless the situation, there is a man throwing and a man trying to hit. And is there anybody who's ever forgotten the difficulty of trying to do either one? There are also verities in baseball. Ninety feet between the bases, the distance between the points of the most priceless diamond in the world has always seemed to work. In 1900, a man would hit the ball in the shortstop hole, and the shortstop would gun the ball across the diamonds and the man who hit the ball would be out by a step. The balls are supposed to be livelier now, the men are faster, the arms stronger. A man hits the ball in the hole, the shortstop throws, the batter is still out by a step. Baseball is a game that evokes summer and boyhood. Football is a cool, fall Sunday afternoon and colder Monday night. Basketball and hockey are winter sports. Baseball, for all the time it's played at night, is still meant in the words of the late Bill Beck, to be played on grass fields on sunlit summer afternoons. There are not enough midweek day games, but there are enough to give every businessman the feeling of being a kid again, of playing hooky and skipping school. Where else can you buy a $5 ticket and for that price get three hours of youth? When I was in college a bleacher seat at Fenway Park cost a dollar. You spent that dollar on a summer afternoon, and you felt like you were buying the whole sport. Since then, I've seen a lot of seasons come and go, but I haven't forgotten the bleachers at Fenway Park. You see, baseball's wonderful present is always enhanced by its past. Eric Davis of the Cincinnati Reds comes along and he's compared with another hardhitting, smooth fielding outfielder, Willie Mays. Don Mattingly is compared with another Yankee First Baseman, Lou Gehrig, the iron man. And Dwight Gooden isn't just Dwight Gooden, he's Sandy Koufax, another pitcher famed for his dazzling fast ball and deceptive curve. You talk baseball and before you know it, you're back to the boys of summer or the gas house gang. Each season is linked, but it's also different. There's just no figuring it. Take this season. Who knew back in March the new slugger in baseball would be a pleasant giant from Oakland named Mark McGuire? And then there's the story about a fine old baseball town named Milwaukee, turned baseball daffy when its young team began the season with 13 straight wins. Never mind that soon afterward the same team lost 12 in a row. The Brewer fans still look at this season as the start of something. Baseball endures. It is there for us every day. Late on a summer night in New York or Chicago or San Francisco -- the music of baseball can be heard drifting out of cabs or bars or open windows. With any radio cheer, suddenly your world is one of Benders yelling in thebackground, of cheers rising in Ebbett, of a baseball symphony. The game sings to us, soothes us, like a childhood lullaby. It's hard to let this game go. You hold a bat for the first time, you slap a fist into the mitt of a glove and you're a goner. Baseball has you. Look around this ballpark this summer afternoon. It's the same as it's ever been, while at the same time completely new. George Babbitt was right. It's of eternal importance, all of it. Recap WOODRUFF: One last look at today's top stories. Pilot error was a possible cause of the Detroit airliner crash Sunday night, the government's chief investigators said on the NewsHour. A Swiss court ordered Iran contra bank records turned over to U. S. investigators, and the United States flatly rejected a renewed proposal by Iran to swap American hostages for Shiite prisoners in Israel and Kuwait. Good night, Jim. LEHRER: Good night, Judy. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.