The NewsHour with Jim Lehrer

RAY SUAREZ: Good evening. I'm Ray Suarez. Jim Lehrer is on vacation. On the NewsHour tonight: A summary of today's news; turbulent times for major American airlines; amid all the dot-bombs, eBay finds online success; the U.S. and Mexico argue over a Texas execution; and a new book on NASCAR racing considers men and speed.

NEWS SUMMARY

RAY SUAREZ: Several more large companies have now restated their finances. They did so as a deadline passed Wednesday for hundreds of executives to vouch for corporate financial records. AOL-Time Warner reported its America Online unit might have improperly booked nearly $50 million in business. Capital One Financial, a major credit card company, said it would have made about $50 million less in income last year if it listed stock options as expenses. And drug maker Bristol Myers Squibb said it might have to restate sales and earnings. The financial services company CONSECO faced new troubles today. Late Wednesday, the firm disclosed a loss of more than $1 billion in the second quarter, and a federal investigation into its accounting. CONSECO also warned it might seek chapter 11 bankruptcy protection. It blamed loan defaults and the recession. Flood waters began receding in the Czech capital of Prague today, but rivers elsewhere in central Europe rose to historic levels. We have reports from Juliet Bremmer and Gaby Rado of Independent Television News.

JULIET BREMMER: The water is dropping and Prague can see the havoc that these floods have caused. Smashed timber is all that remains of on house on this water logged street. Firemen search hopelessly through the wreckage. A devastating reminder of the destructive power behind the flood can be seen on this amateur video as a house slides into the river, disappearing in a cloud of dust. The Czech republic isn't in the clear yet. This chemical plant has started to leak chlorine. The misery spreading east, in the capital of Slovakia, they rush to get the sandbags out. The river Mrava has already overflowed, again firemen left to try and save homes.

GABY RADO: They knew the floods were coming but no amount of German efficiency could prevent the riverside areas of Dresden. The waters of the Elbe swollen by the surge from the rivers of the Czech republic the south were today rising by six inches an hour, the worst flooding since 1945. The torrential waters damaged houses where some 20,000 people have been forced to leave their homes. It's too early to say how much harm has been done to Dresden's uniquely restored architectural jewels. We're now in the Sempra Opera House in the heart of Dresden. Like everything else around here it was destroyed by allied bombs in 1945. It has only reopened in 1985 and the Elbe unfortunately is now some eight or nine feet deep in the basement. The fire brigade are trying to pump out what water they can. The past two days have also seen one of the largest mobilizations of the German armed forces in peacetime for the flood crisis. Because of the threat to hospitals in low-lying areas near the Elbe, several hundred patients have had to be moved.

RAY SUAREZ: The flooding across Europe has so far claimed at least 100 lives. An execution in Texas put a new strain on U.S. relations with Mexico today. Javier Suarez Medina was put to death last night for killing a drug agent in Dallas in 1988. Mexican President Vicente Fox had appealed for clemency. After the execution, he canceled plans to visit President Bush later this month. We'll have more on this story later in the program. About 600 relatives of September 11 victims sued Saudi Arabian officials, banks, and charities today for more than $1 trillion. The suit accused them of financing Osama bin Laden's network, and the attacks. 15 of the 19 hijackers were Saudis. In Washington today, the families said they hoped to choke off support for terrorists.

DEENA BURNETT, Wife of Victim: It's up to us to bankrupt the terrorists and those who finance them so they will never again have the resources to commit such atrocities against the American people as we experienced on September 11.

MATT SELLITO, Father of Victim: If the odds are stacked against us, we will beat them. And we will pursue this action until justice is served and terrorism is stopped.

RAY SUAREZ: Today's suit also named the government of Sudan. The U.S. Government will not have to identify all those detained after September 11, for now. A federal judge in Washington today put a hold on her previous order to release the names. The delay gives the Bush Administration more time to appeal. In all, more than 1,200 people were picked up after the attacks. Most have since been deported. That's it for the News Summary tonight. In California today, a 16-year-old boy was sentenced to 50 years to life in prison in a school shooting outside San Diego. Charles Andy Williams pleaded guilty to killing two students and wounding 13 people in March of last year. In court today he said for what it's worth, I want everybody to know I'm sorry. That's it for the News Summary tonight. Now it's on to: Major U.S. airlines hit turbulence, eBay succeeds where others have failed, an argument between the U.S. and Mexico, and a new book on auto racing.

FOCUS ROUGH AIR

RAY SUAREZ: It's been a bad week for the airline industry. Terence Smith has that story.

TERENCE SMITH: That bad week got worse yesterday, when United Airlines declared it may go bankrupt as early as this fall. The nation's second largest airline is losing a million dollars a day. United says the only way to avoid Chapter 11 is for its unions to accept steep financial concessions. USAirways recently sought similar concessions, and failed. It declared bankruptcy on Sunday as part of a restructuring effort. Still, the airline plans to return to profitability by early next year. It sought to reassure its customers with these newspaper ads Tuesday. That same day, American Airlines revealed its own bad news: 7,000 layoffs-- about 7% of its workforce-- and cutbacks in its flight schedule.

TIM DOKE, Spokesman, American Airlines: In an industry that's absolutely bleeding cash right now, we've got to do whatever we can to cut our costs.

TERENCE SMITH: But fewer flights means fewer options for passengers on the world's number one carrier.

PASSENGER: I'm an American flyer but as the more inconvenient it becomes I'm going to switch.

TERENCE SMITH: The hard times for the airlines began well before September 11, as labor problems and the recession hurt profitability. After the terror attacks, passenger demand fell by as much as 25%. Airlines pared back their flight schedules. They also laid off some 100,000 workers in September alone, workers who flocked to job fairs like these. To bolster the industry, which lost $10 billion since 9/11, Congress provided $5 billion in cash grants that helped companies like America West stay afloat.

W. DOUGLAS PARKER: We most certainly will file bankruptcy. In today's economic environment, it's unclear as to whether we could have made it through a bankruptcy.

TERENCE SMITH: Lawmakers also set aside $10 billion in loan guarantees, to help airlines borrow from private banks. The guarantees are subject to federal approval. So far, the government has provided $380 million in loan guarantees to America West and given conditional approval for $900 million more for U.S. Airways. United Airlines wants a loan guarantee, too, of $1.8 billion. The company lost $2.1 billion in 2001, the worst year ever in the business. Despite the red ink for the major carriers, several low-cost airlines are making money. That includes Southwest, the airline of no food, no assigned seats, and no major hub cities, and a new airline, Jetblue, which economizes by flying just one plane model, the Airbus A320.

TERENCE SMITH: Joining me now are Michael E. Levine, a professor of law at Yale University and former senior airline executive and Paul Dempsey, director of the Institute of Air and Space Law at McGill University. He is vice chairman of the board of directors for Frontier Airlines. Gentlemen, welcome to you both.

Michael Levine, what prompted United's announcement that it might have to proceed to bankruptcy?

MICHAEL LEVINE: Well, United is in an unusual situation. They are actually owned 55% by some sub groups of their employees, and those employee groups are unionized in democratic unions. And what's clearly a problem for United is that the labor force does not accept that United is in the kind of trouble it's in. United had been trying to negotiate with this labor force and not getting very far. Even the well advertised concession deal from the pilot was a 10% wage cut this year followed by three raises of seven and eight and eight % so in effect at the end of three years they'd be making a lot more money than they were making this year and they'd have gotten another 10 or 15% of the company. So they have a real problem persuading their labor force that they need to do something drastic.

TERENCE SMITH: Is that, Paul Dempsey, because the labor force doesn't take them seriously, doesn't read the numbers in the same fashion?

PAUL DEMPSEY: Well, there's a tremendous sense of denial within the company. And it's longstanding. I mean the company has always had a corporate culture that it could never fail. It was simply too big; until recently it was the world's largest airline. And the employee ownership really was a missed opportunity I think for the company. It should have been an opportunity for management and labor to come together and run their company collectively for their collective good will. Unfortunately, what happened was there was a drift away between labor and management and animosity created between the two groups. The employees owned 55% of the company. It should not have turned out this way. I think you have a situation at united that is very dysfunctional and on a collision course, I think, with reality. United Airlines is losing money, some project it at the rate of about $4 million a day. They have $2 billion in cash roughly but they're going to have to return about $800 million of that to the banks in the fall. And they simply are in a position where they have to come to grips with their liquidity position and the cost control issues and they're not getting what they need from the other side of the bargaining table in terms of concessions.

TERENCE SMITH: Michael Levine, broadening this out to the industry as a whole, it lost some $11 billion last year. What's the fundamental problem?

MICHAEL LEVINE: Well, the fundamental problem is actually pretty simple. The airlines really had a period in the '90s when business customers especially would pay almost anything to fly and airlines ordered a bunch of planes, got in a bunch of capital projects going and gave a number of very generous labor settlements. They basically built in a cost base that they can now not cover in the revenue base. You had a recession. You had the effects of September 11. You had the growth of discount carriers in part because the fare structure was so high. The result is customers have choices. They don't feel as rich as they felt in the '90s and are unlikely to feel that rich again for some time. And the airlines simply can't bring in enough revenue to cover the cost commitments they made in the '90s.

TERENCE SMITH: Is the problem, Paul Dempsey, now restructuring all those agreements in order to make profitable what is not now profitable?

PAUL DEMPSEY: Well, the agreements have to be restructured. That's absolutely true. It's impossible for a company to pay pilots $1,000 an hour to fly. It's not sustainable but it's more than that. The companies have to restructure themselves. They need to rethink their route structures. Companies like United perhaps ought not be flying a lot of short haul routes. They shouldn't be co-chairing with other carriers that have a lower cost basis and focus on what they do well, which is long haul and international transcription. We have about 17 interior hubs in the United States. That's more hubs than the country reasonably can sustain. Some of those hubs probably have to disappear. And a lot of the capacity that's being flown has to go away too. That means airplanes need to be parked in the desert in larger numbers than we've seen so far September 9/11.

TERENCE SMITH: Michael Levine.

MICHAEL LEVINE: I disagree.

TERENCE SMITH: Go ahead.

MICHAEL LEVINE: I disagree very strongly with that. I think if the airlines restructure their commitments most of the hubs are viable, perhaps one or two might not be. I think that the larger airlines can continue to provide the service they provide, which is frequent... connections through the hubs for people in smaller and medium-sized cities, and I think that airplanes parked in the desert will just come back in the hands of discount carriers unless someone is going to have an orgy and blow them all up, which isn't going to happen.

TERENCE SMITH: Paul Dempsey.

PAUL DEMPSEY: Well, if this were just a situation that had happened in the last two years, I might agree with you. But this whole scenario played out from 1989 to 1993. In those years we had five major airlines fall into chapter 11 bankruptcy. Two of those were liquidated, Pan Am and Eastern. And a couple of those probably would have been liquidated -- TWA eventually -- had American Airlines not acquired it and America West recently received a government loan. Otherwise there are some analysts who believe that America West was in jeopardy. So this seems... the airline industry seems to be particularly prone to get hit hard during times of economic recession.

TERENCE SMITH: Michael Levine, in the midst of all this bleak news of course you referenced earlier the success of some low-cost airlines like Southwest and Jetblue. Explain that. What are they doing right that the others aren't?

MICHAEL LEVINE: Well, they do two things. One of which they've been helped in, as I say, by the big airlines. They offer particularly people who want to take trips on relatively short notice or may not want to stay a Saturday night some very attractive fares made more attractive by the fact that the fares charged to those same short term business travelers had gotten to really preposterous levels. They went up 40% between 1998 and 2000 at the big carriers. This provided a pricing umbrella. That's what sort of really started the discount sector moving. Southwest, of course, has been growing but all these other airlines began growing as well. They operate particularly Southwest on a sort of a different basis. They say to the passenger, "look, we won't go from a convenient airport necessarily. We won't let you reserve a seat in advance so you're going to have to stand in line if you don't want to sit in the middle seat in the back of the plane. We won't coordinate connections for you. But we ll be cheap, safe and clean. For many leisure travelers that's adequate. For business travelers faced with the choice of paying $2,000 to go round trip coast to coast or to pay $500 or $600 on Southwest, giving up conveniences is easily worthwhile. So what Southwest has done is to offer a very attractive alternative at a time when the bigger network airlines basically walked away from a good piece of the market. And they've really prospered. Imitators have prospered as well.

TERENCE SMITH: Paul Dempsey, can the others either reshape themselves or alternatively provide some other, somewhat more commodious travel for other customers?

PAUL DEMPSEY: Well, I think we're going to see. American Airlines is talking about establishing a continuous hub in Dallas, and with three domestic hubs in the United States there will be an opportunity to construct operations whereby connections will flow either Chicago, St.. Louis or Dallas, all of which are cities in which American has an enormous presence, and reduce costs significantly on the Southwest model but with a network carrier. The problem of the hubs is that they are very inefficient in terms of their use of the flying resources of the company and the labor resources of the company and fuel and time. But they are very good at revenue generation because they do offer the marketing people enormous opportunity to sell a plethora of origin destination markets. And a lot of revenue is generated on that basis. So therein lies the yin and the yang. I mean, the revenue of the hubs is wonderful. The cost of the hubs is terrible. Right now the two things that airline management has to focus on, is number one liquidity. They do not want to run out of cash. Number two they want to focus on cost. And costs are at levels at the major airlines -- many of the major airlines that are simply not sustainable in the long term.

TERENCE SMITH: Michael Levine, look ahead for us a little bit, will you, as to what we should expect as consumers, as fliers. More bankruptcies, more difficulty -- what do you anticipate in the coming months?

MICHAEL LEVINE: I think the major airlines will have to restructure at the beginning especially as we've just seen with US Airways and I think we're likely to see with United, I think that restructuring is more likely to be in chapter 11 than outside it. As time goes on and people get the idea that this restructuring is going to happen one way or the other, we may see more voluntary workouts but they will be done in a sense in the shadow of chapter 11 with the understanding that if the airline can't achieve costs that are able to be covered by customer revenues, they'll have to declare chapter 11 and let the judge help them do it. If that happens, I believe we will see four to six surviving, large hub airlines perhaps as many as there are today, which is six, which will operate much the kind of service we see today perhaps a little less in the way of on-board amenities, which customers have not shown much interest in paying for. If they can't do that, the ones that can't will go out of business. Some of their capacity will be replaced by other hub airlines and some of it will move to the discount sector. I think we're really at an important turning point in the industry. One thing I'd like to add: This business of trying to reengineer hubs to make them a little more like Southwest is a very risky move. Most of the big airlines have studied this before and concluded they would lose more revenue from connections from small cities, inconvenient connections, than they would gain in costs. American clearly has come to a different conclusion. It will be very interesting to see.

TERENCE SMITH: We'll have to follow it as well. Thank you both very much.

FOCUS BIDDING FOR SUCCESS

RAY SUAREZ: Now, a major bid for online success. Spencer Michels reports.

SPENCER MICHELS: Thousands of employees lost their jobs, investors lost money, and landlords lost tenants with the collapse, about two years ago, of Internet-based companies, the so-called dot-coms. Many of these firms had sketchy business plans and never showed a profit. But one Internet company survived and prospered: EBay, the online auction site, which is headed by CEO Meg Whitman. Even before the dot-com debacle, she was steering a different course.

MEG WHITMAN, CEO, eBay: We didn't subscribe to sort of the dot-com mania of spending any amount of money no matter what results you got for it. But secondarily, we don't have a classic e-commerce model. We don't take title to the inventory.

SPENCER MICHELS: EBay was started by computer programmer Pierre Omidyar as auctionweb.Com in 1995. It had three workers, and was envisioned as a modest website to facilitate auctions of such items as computer parts and collectibles. The site simply connected buyers with sellers, and originally there was no charge to use it. That policy changed quickly, as did the name and the company itself. Today EBay says it has 47 million users who will buy and sell $12 billion worth of merchandise this year, everything from antiques, musical instruments, and pornography to hot new categories including cars and houses. Fees on those sales translate to revenue-- this year $1 billion-- and profit, for 12 quarters in a row.

SPOKESMAN: And this is EBay stock.

SPENCER MICHELS: Wall Street has been impressed since the day, in 1998, the stock went public, according to Aaron Task, who covers the Internet for thestreet.Com, and interviews industry analysts.

AARPON TASK: They're bullish on it mainly because eBay is executing. EBay's clients, or users, really love eBay. They have what some people call a cult following. And, you know, the company keeps making money, which is very rare in the dot-com world.

SPENCER MICHELS: The cult of eBay was very evident recently at eBay Live, an event in Anaheim, California, that attracted more than 5,000 buyers and sellers, many fascinated with eBay trivia.

SPOKESMAN: When did Pierre write the code for eBay? What weekend?

PERSON: Labor Day.

PERSON: Labor Day.

SPENCER MICHELS: More and more eBay users have built entire businesses on the web site, and some have developed a kind of social life as well. Eric white has been using eBay since its first year.

ERIC WHITE, eBay User: I want to sit at home and make money. I have thousands of things to sell. I have so much stuff. I have collected carpets and Afghan fabrics and Indonesian batiks and stuff. It's like having a flea market, like, in your bedroom every day. People are addicted to flea markets.

SPENCER MICHELS: Dan Sustar used to work for Ford Motors, but now he sells casino supplies, power tools, and jewelry online.

DAN SUSTAR, eBay User: It's an American dream that they talk about in all those infomercials, you know, and we accomplished the American dream, and we actually do extremely well on eBay.

SPOKESMAN: I don't know this guy.

SPENCER MICHELS: But eBay has become more than a commercial tool for some. Jim Griffith, who is called Uncle Griff by the eBay crowd, says the web site saved his life.

JIM GRIFFITH, eBay Ambassador: I didn't know what I was going to do with myself. I felt sort of useless. I'd had a string of failures; not feeling so well. I realized afterwards I'd been diagnosed as clinically depressed, and all this stuff sort of came to a head, and I was ready to do myself in, to be honest with you. And that summer I found eBay through a friend.

SPENCER MICHELS: Griffith got active on the site, participated in its chat rooms, gave advice to other users, and eventually got hired by eBay as an ambassador. Now he preaches the eBay gospel.

JIM GRIFFITH: Everyone needs money. "Why do you think they call it money?", as the line goes. But, you know... and this is a great way of doing it. These are people... all of us, on some level, have to trade in order to survive. Money is involved now. It makes it a little bit more easier to trade, and making money is not necessarily a bad thing. It means your business is more successful.

SPENCER MICHELS: Making money for others as well as for itself is a key to eBay's success, according to Rajiv Dutta, Chief Financial Officer.

RAJIV DUTTA, Chief Financial Officer, eBay: This was really a company that used some of the best elements of a brand-new technology, a brand-new infrastructure medium, which was the Internet, and applied it to business in a way that had not been possible before. And what it empowered was small business. And this was an entire generation of small business merchants, and enabled them to efficiently reach a mass market.

SPENCER MICHELS: While many users, like these at the Anaheim meeting, appear to love eBay, others have some very specific complaints. Richard Doporto collects stamps, and eBay is a key site for his stamp buying and selling. But he and others resent that eBay refuses to protect them by disciplining dishonest stamp sellers.

RICHARD DOPORTO, Stamp Collector: It seems like you really have to take a very close look at what you're buying, because there's a lot of dodgy sellers.

SPENCER MICHELS: What did eBay say when you complained?

RICHARD DOPORTO: That they're not into the business of authenticating what is a real stamp or a fake stamp or an altered stamp. And basically say they act as a venue just to bring a seller and a buyer together, and if there's an issue, you have to work it out amongst yourselves. What it seems to us is that they're protecting the seller and not the buyer.

SPENCER MICHELS: Doporto also asserts that when legitimate stamp collectors try, via chat rooms, to warn others about dishonest sellers, the complainers are censored by eBay and barred from the site. With stamps, sports memorabilia, antiques, and art, eBay has long maintained that it can't be held responsible for fakes. Some criticism of eBay is more universal. For example, high-tech consultant and eBay user Amy Khehl thinks the fees are too high.

AMY KHEHL: You have fees for final value; there's fees for special insertions like the highlight, and it really can add up.

SPENCER MICHELS: Those fees are increasing, and the feeling of community that eBay tries to promote doesn't interest Khehl. In fact, she is disturbed by eBay's size.

AMY KHEHL: It really just feels like a big, monopoly business that made it to the market at the right time, and you kind of have to use them because they have the most people using their site, so you get stuck into it whether you like it or not.

SPENCER MICHELS: Besides its rapid growth, several recent major developments have also begun to change eBay. One was the addition of fixed- price sales-- so-called "buy it now" items that aren't auctions at all, and that currently make up 20% of eBay's business. Other changes: EBay's decision to acquire the rival billing service Paypal for $1.5 billion, an admission that it's own billing service, Billpoint, was losing ground. It will be phased out. And eBay plans to start a new daily TV show called "eBay Today" to promote itself.

SPOKESPERSON: We have built something totally amazing.

SPENCER MICHELS: Despite the fact that eBay has thrived, reporter Aaron Task says a few stock analysts are bearish on the company.

AARON TASK: People who are less optimistic about eBay point to mainly the fact that the stock is very richly valued. Right now it's trading at about 75 times earnings for next year. They think that the stock could fall as much as 15-20% in a short period of time, if the market continues to go down, if eBay stumbles in its execution.

SPENCER MICHELS: But eBay sees an ever-expanding market for its services.

RAJIV DUTTA: We estimate that eBay's addressable market is about $1.8 trillion. We actually believe that the overall size of the market is enormous. And in fact in some of our most penetrated categories, our market share is less than 2%. So we think we actually have a long way to go.

SPENCER MICHELS: As for eBay's market size...

RAJIV DUTTA: Hopefully, every man, woman, and person in the world.

SPENCER MICHELS: EBay employs 2,600 people, whose challenge now is to keep the site growing without destroying the mom-and-pop feeling that led to its original success.

RAY SUAREZ: Still to come on the NewsHour tonight, a U.S.-Mexico rift, and a book about auto racing.

CONVERSATION

RAY SUAREZ: Now, a conversation about a new book, and to Gwen Ifill.

GWEN IFILL: The National Association for Stock Car Auto Racing, NASCAR, is big business. TV ratings are up more than 30% over last year, crowds are huge, and by most accounts, the owners, drivers, and sponsors are raking in big profits from a sport that has suddenly gone mainstream. Dale Earnhardt, Jr., the son of perhaps the most famous stockcar driver ever, explains the sport's appeal this way: The sounds, the speed, the danger, going to a race is like going to the biggest damn circus in the world, or a rock-n-roll festival. It s like sensory overload. That description and others like it can be found in G. Wayne Miller's new book, "Men and Speed: A Wild Ride Through NASCAR's Breakout Season."

Mr. Miller is also a staff writer at the "providence journal." He joins us now. Welcome.

G. WAYNE MILLER: Thank you. Glad to be here.

GWEN IFILL: Before you wrote this book, I'm given to understand you had never actually been to a NASCAR race before. What made you decide to do this?

G. WAYNE MILLER: Well, I had not been to any kind of automobile race whatsoever. I had no interest it, but I began to hear, and then increasingly began to hear a lot about NASCAR. I often tell the story, we live in a little town, and Dale Earnhardt's image appeared on the Coke machine one month. And so I started looking into it because I realized clearly something big was going on here. So I guess I came at from the perspective of it being a cultural phenomenon, and that was my initial intrigue into the subject.

GWEN IFILL: So you decided to climb inside the 2001 season with a team of racers who are owned by Jack Roush, --

G. WAYNE MILLER: Right.

GWEN IFILL: -- this character who populates your... who is the main character in your book in these four racecar drivers. Why 2001? Why was that the breakout season?

G. WAYNE MILLER: Well, it was a breakout season because NASCAR, which had grown and grown and grown and not really had gone mainstream, had just won this nearly $3 billion national TV contract. And that contract was going to start in the year 2001. Some new raceways had opened up during that year. And this really was going to be the coming-out year when NASCAR would take its place with baseball and football and basketball as one of the big sports.

GWEN IFILL: But NASCAR is pretty different from those sports in lots of important ways.

G. WAYNE MILLER: Yes, it certainly is. I mean, certainly in its origins. It grew up in the southern part of the country, and initially and for many years was really just a white male sport. But that has all changed. So 2001 was going to be the coming- out year. And on the very first day of the coming-out year, the biggest star in the history of stock car racing died, and that would be, of course, Dale Earnhardt.

GWEN IFILL: Tell us a little bit about that. That was something which caught everyone's attention whether we were NASCAR fans or not. And it got a lot of coverage not only how he died but then how NASCAR dealt with his death.

G. WAYNE MILLER: Yeah. I'm sure that is the first time NASCAR ever made the front page of the "New York Times" for two straight days, and it was a cover piece for "Time" magazine. What happened after Earnhardt died was an enormous safety controversy, and there were people, including some of the people whom I write about, who felt that if NASCAR had been more strident in demanding certain features in the cars and in terms of head protection, that Earnhardt might not have died. I mean, that whole issue had been on the table prior to that. Earnhardt died, and then in many respects NASCAR sort of bungled. I mean, they had a public relations nightmare iswhat I call it. They didn't respond properly. They wouldn't answer questions. Behind the scenes a lot was going on, and to make a long story short, by the end of the year they had responded properly and the safety of drivers was much improved by the end of the year. But it was a very rocky few months there after Earnhardt died, and they were criticized left and right, and I think justifiably so.

GWEN IFILL: Including by some of the drivers who you profile in this book.

G. WAYNE MILLER: Yes, including by a number of drivers. Jeff Burton was perhaps leading the charge. And he is one of the people I write about in "Men and Speed." Jeff is an unusual man. And this was one of the surprises in doing this book. I guess I had sort of the stereotypical image that a racecar driver is kind of this dumb guy who chews tobacco and maybe drinks whiskey and gets in a car and drives in circle. And there are some like that. But at this level you have more people like Jeff Burton who is a very analytical man, he's philosophically inclined, smart guy, funny guy, totally surprised me. And he had latched on because he is a smart guy early to the safety issue, and had made it one of his... in fact, his cause prior to Earnhardt dying. So he was livid when Earnhardt died and also a bit scared.

GWEN IFILL: You know, you don't hear a lot about these guys being scared even though what, to me, what they do is one of the scariest sports imaginable.

G. WAYNE MILLER: Right.

GWEN IFILL: I was wondering as I was reading this book, what makes someone do this? And I was struck by a section that you write in which you got behind the wheel of a modified car on a highway on a long trip, and got a little taste of the speed yourself. Could you read just that section in the book I highlighted for you?

G. WAYNE MILLER: Yes, I'd love to. And it was actually one of the glorious days of my life. (Laughs) I used to be embarrassed to admit that, but I'm no longer embarrassed to admit it. It was a car that could go in zero to 60 in like four seconds and just this amazing machine. I've never driven anything like it. Volvo Sedans in my family. And this is that passage that you underlined. "I was totally in the zone now: Knuckles white, sweat on my forehead, the flutter in my chest, a narcotic pounding. I could see with a clarity I had never before experienced and my reflexes were dangerously sharp, but sound had virtually ceased, as if they had dropped the soundtrack out of the movie. I think Jack said something about showing no mercy now, but I didn't need Jack to light the way. I punched the pedal to the floor, and we finally smoked the Firebird. The speedometer read 120, or so Jack later informed me."

GWEN IFILL: 120 on an actual public road. This is not a track.

G. WAYNE MILLER: And this was during... yes, this was during rush-hour traffic going into Lexington, Kentucky. It was an insane, illegal, stupid thing to do, but few things in my life have felt better. ( Laughs ) I have to admit it. That gave me an insight into why these guys do it.

GWEN IFILL: And do they consider this just a necessary evil, it's a trade-off, it's worth it?

G. WAYNE MILLER: Yes. Yes, I mean, they're willing to take that risk in pursuit of that feeling that I had.

GWEN IFILL: Jeff Burton, who you just alluded to, one of the things he also said was... he also said he didn't think that big wrecks were necessary to have good races. Is that what, however, draws people to these races, the prospect of a big wreck?

G. WAYNE MILLER: There's no question that is a major attraction for a lot of fans and probably most fans. It's like going to a circus and watching a high wire act. You know, if you watch the high wire act with a safety net, it's not quite as thrilling as if they don't have the net. So yes, fans go for that. I don't think anyone wants somebody to die or even get seriously injured, but there are a lot of wrecks in NASCAR racing, more so with certain tracks than others, but no race passes without a wreck. And there's a certain heart- stopping moment when a car goes into the wall, fiery and flaming, and with that screeching, horrible sound, and then it all goes silent. You wait to see if the webbing comes down and the driver is going to crawl out or are they going to have to call an ambulance.

GWEN IFILL: How do families cope with this? They travel with them to many of these races.

G. WAYNE MILLER: Families cope with it in different ways. In the case of Kim Burton, she has become more unnerved by it as she's become older and become a mother. The risk to her I think is more onerous than it used to be. Her justification is, you know, this is what my husband likes to do and what he's going to do. It has given us a good lifestyle. And hopefully we're going to be lucky. You know, they all have... they all rely on luck to get them through.

GWEN IFILL: So there is also a lot of money to be made.

G. WAYNE MILLER: There is a lot of money.

GWEN IFILL: NASCAR as a sport has turned the corner. Bill France and his family who basically owned NASCAR. They founded it and they control it completely.

G. WAYNE MILLER: That's right.

GWEN IFILL: What is the future for the sport, financially as a business, as well as a popular pastime?

G. WAYNE MILLER: Well, in terms of the France family, both Dale and his brother, who is executive vice president, Jim, are listed on Forbes as billionaires, so their future I think is quite bright if you look at it monetarily. The sport continues to grow in terms of the Nielsen s this year. I do think at some point, though, there will be a saturation. I don't think there is an unlimited growth market opportunity for the sport. They have no intention of going international for a variety of reasons, so they're really contained on this continent. And at some point they'll peak, and that will probably be sooner rather than later. But then I think they'll maintain that very high level of interest and awareness. The figures they quote is that they have now 75 million fans. And that was an internal study and so take it with a grain of salt, but the Nielsen s, as you mentioned earlier, which don't lie, have shown a tremendous increase.

GWEN IFILL: Well, thank you, Wayne Miller, for taking us inside a place I know I wouldn't ordinarily go.

G. WAYNE MILLER: ( Laughs )

GWEN IFILL: Thanks a lot.

G. WAYNE MILLER: Thank you very much for having me.

ESSAY

RAY SUAREZ: We had hoped to be able to bring you the story of the rift between the U.S. and Mexico over a recent Texas execution, but technical difficulties in Mexico City prevented that. Instead tonight we close with a Richard Rodriguez essay.

RICHARD RODRIGUEZ: Ground zero, the military term. That point at which a nuclear or atomic explosion occurs. Ground zero has not been an adequate enough description for this vast, gaping wound in lower Manhattan and in our heart. The ancient Hindus and the Maya Indians who came upon zero, however, understood that zero is a number, a beginning of numbers. Zero gives you a way of marking the tenth finger on your hand. Zero expands a lowly worker's imagination toward a million dollars. Zero transports astronauts toward the infinite. We move toward one from zero. Here we are in summer anticipating one. In cultures all over the world and through time, the passage of 12 months, four seasons, marks a kind of release for the living from the pain of having to remember the dead within the proximity of a calendar year. The way she laughed last summer at the lake, the way he stood with the children next to the Christmas tree. After that terrible day in September, Americans used 9/11 or 9-1-1 as shorthand for tragedy and terror. And we began counting from zero as the gaping hole was slowly cleared of debris. We observed the passage of one month, two, six and now the coming anniversary of zero.

OFFICER: Back through here, okay? Just come on around.

RICHARD RODRIGUEZ: So many people made a pilgrimage to the gaping hole that months ago city officials erected a platform so we could all look... at what? At nothing. We stared at this hole that reminded us of zero. For if zero is a number it is also paradoxically nothing, a void. It is also chaos. Zero divided by 12 is zero. Zero divided by 365 equals zero. It was easy enough for the federal government to repair the hole in the side of the Pentagon. What, on the other hand, were we to do with this gaping hole that reminds us of zero? The most touching construction of remembrance were beams of light. Architects and developers have suggested office buildings and apartment houses and schools for the site. (Bell ringing) What no one wants to say is that this zero is not utter vacancy but is a cemetery. The undiscovered dead lie here as certainly as they do in their coffins at Arlington or Normandy Beach. Within this zero are fragments of flesh embedded in stone or in concrete. Standing here on the other side of America in a military cemetery in a presidio in San Francisco, I think that some part of ground zero should be preserved as a cemetery with tombstones or memorials with names etched in stone against time like these from another century. There are, after all, other graveyards in lower Manhattan. In the middle of all the buying and selling on Wall Street lie some of America's oldest cemeteries. Perhaps as with the graveyard shattered by Trinity Church, a place of prayer and meditation should be erected at ground zero -- a place welcoming to people of all beliefs or unbelief and housing the sacred text of our human faith in the infinite. I cannot think of better protection from future mad terrorists than having the Koran alongside other holy scriptures forever housed at ground zero. Despite the Europeans' insistence that America was virgin land, I think the soil is haunted -- dead Indians everywhere under our feet. On September 11, I think Americans will be released from zero with one, but we will also realize that we can never be released from zero, nor should we. The dead lie within zero. We shall continue to live our lives in lower Manhattan and all across America forever, counting from zero. I'm Richard Rodriguez.

RECAP

RAY SUAREZ: Again, the major developments of this day: The Securities and Exchange Commission released more corporate financial filings. AOL-Time Warner reported its America online unit might have improperly booked nearly $50 million in business. And flood waters receded in Prague, but kept rising elsewhere in central Europe. About 600 relatives of September 11 terrorism victims sued Saudi Arabian officials, banks and charities for more than a trillion dollars. The suit accused them of financing Osama bin Laden's network and the attacks. And a 16-year-old boy was sentenced to 50 years to life in prison for killing two people and wounding 13 at a school outside San Diego last year. We'll see you online, and again here tomorrow evening, with Shields and Brooks. I'm Ray Suarez. Thanks and good night.