Another perfect storm

October 29, 2012
By: Eric Lundin

Much of the East Coast has been bracing itself for Hurricane Sandy while the rest of us wait and wonder. After developing on Oct. 22, it hit Jamaica, Cuba, and the Bahamas, and eventually became the largest recorded hurricane to roil the Atlantic, with a diameter approximately 1,000 miles. Described as a mega-storm by some, it has the potential to disrupt the lives of 60 million people in the U.S. along. That’s 20 percent of the U.S. population. Wow!

It brings to mind a few other well-known storms, like the one that hit the northeastern U.S. in October 1991. Although described as “the perfect storm” and commemorated in a book and a movie of that title, that one was in a different category altogether. Much smaller than Sandy, it left 38,000 without power, caused $200 million in damage, and resulted in 13 deaths. The storm that hit the northeast about a year ago, the 2011 Halloween Nor’easter, dropped quite a bit of snow and ice, which broke a vast number of tree limbs, many of which took power lines down as they fell. It left more than 3.4 million people without power and resulted in 39 deaths. It’s hard to pin down the amount of damage, but it was estimated at $3 billion in Connecticut alone. Whether Hurricane Sandy will be on par with the other big storm in recent memory, Hurricane Katrina—responsible for $81 billion in damage and 1,833 deaths—remains to be seen.

Hopefully events like this serve to reminder us what’s really important. While many of us are busy running a business, making capital equipment purchases, recruiting new employees, working on training plans and professional development programs, and making myriad other decisions every day, a massive storm like this forces everyone to make preparations for himself, his family, and maybe a neighbor or two.

Even the New York Stock Exchange, which conducts nearly all of its business electronically, decided to close on Monday, Oct. 29. This led to discussions among the Federal Reserve Bank of New York, the Securities and Exchange Commission, and the Securities Industry and Financial Markets Association, with an agreement that all stock markets in the U.S. would close on Oct. 29.

Will they re-open on Oct. 30? Impossible to say, but it’s likely that they’ll be back in business within a couple of days. Can we say the same about manufacturers up and down the East Coast? No way. Manufacturers can’t re-route the operations electronically.

It brings to mind a storm of a different kind that wrecked a tube and pipe production facility in Decatur, Ala. On April 27, 2011, at about 4:00 p.m., an EF-5 tornado hit Independence Tube Corp.’s building.

Although 25 employees and two truck drivers were in the building at the time, none suffered any injuries. This was a minor miracle considering that most of the building, 385,000 sq. ft. of 435,000 sq. ft., was destroyed. The equipment and inventory damage was extensive, including a pair of 1-ton pilings that were hurled about 250 feet and a rail spur that the tornado moved 4 ft. from its original location.

The company management determined that this event would have a minimal impact on its business. It kept all 72 Decatur employees on the payroll; moved many of the employees to its other locations; re-routed incoming coils to its other locations (it didn’t cancel any orders); and tooled up its Marseilles, Ill. location to help handle the overflow. It then concentrated on rebuilding the facility, which it re-opened for business exactly one year later.

Independence doesn’t claim to have accomplished all of this by itself. It got a substantial help from other business in the Decatur area, and a vast amount of support from its suppliers and even its competitors. But the fact is that the company deserves the credit for coming up with a disaster recovery plan and executing it.

Hopefully manufacturers affected by Hurricane Sandy will fare as well.
Eric Lundin

Eric Lundin

FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-227-8262