uly 26, 1999, Issue: 745 Section: News Scan

Senate Hears Y2K Warnings Ramin P. Jaleshgari

Calling anticipated year 2000-related computer failures a "huge humanitarian concern," Jacquelyn Williams-Bridgers, inspector general of the U.S. State Department, told the Senate's special committee on Y2K last week that no business community can completely avoid adverse affects caused by Y2K glitches.

Williams-Bridgers said businesses in industrialized countries will handle Y2K far better than those in parts of Eastern Europe, Asia, and Russia. Industrialized countries, she said, are at a low risk for Y2K-related infrastructure failures, particularly in the finance sector.

By comparison, the State Department predicts a 76% chance that electrical failure will occur in Africa. The result may be a domino effect for U.S. companies that receive raw goods from nations that could become partially crippled by Y2K-related problems.

Williams-Bridgers' evaluation of the problem was bolstered by testimony from representatives from Ford Motor Co. and Philip Morris Cos. Managers heading up Y2K efforts at both companies say the problem will be with business partners that don't have their Y2K houses in order. The result, they say, will be supply-chain breakdowns despite active contingency planning within their own organizations.

"The interdependency of the entire supply chain represents the greatest risk to Ford," said George Surdu, Ford's director of technical services, at the Senate hearing. Surdu went on to identify utility failures within Ford's facilities as another potential concern.

Philip Morris, meanwhile, is stockpiling raw materials and manufactured goods so it can continue to serve consumers in the wake of potential Y2K failures.

Also, companies that do a high degree of international business travel should keep an eye out for a State Department warning to be issued in mid-August. Williams-Bridgers said the department plans to notify foreign governments of its concerns about Y2K-related problems that could affect American citizens living or traveling in those countries.

-- Daren Henderson (TryChange@aol.com), July 26, 1999