GLOBAL BLUNDER

Wants, needs and fears can make people and companies do erratic things. In 1997, AT&T foresaw a need for a trans-oceanic connectivity, and Global Crossing founder Gary Winnick eyed opportunity. Unfortunately, that eye for opportunity was not accompanied by insight as to what the future held. The awesome concept of dropping strongly clad fiber optic cable thousands of feet down in the world's oceans to link networks attracted big-name investors, from SBC Communications to former President George Bush. But while the idea sounded innovative, once the attention and interest in long-haul networks shifted to metropolitan connectivity, Global Crossing was the equivalent of a Rolls Royce stuck in a Louisiana swamp. Without an easy way to reach the amount of customers required to keep margins up, Global Crossing was drowning in debt. But Global Crossing's hard fall could have been avoided. Its fatal mistake was letting U S West slip through its fingers and into the hands of Qwest. In pursuing U S West, Global Crossing's leadership obviously realized the company's growing need to touch more customers than rely on a critical few. But U S West accepted Qwest as its suitor instead. Global Crossing should have trumped Qwest's offer or at least looked to expand in other ways. Apparently, Global Crossing felt its network would support the margins and cover its debt while it concentrated on shuffling executive management around instead. The company had to know long before conditions worsened that action needed to be taken, but it took none. Global Crossing had a great concept and a great network, but it simply failed — or neglected — to shelter itself from the future and ended up bankrupt because of it.