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Nikon statement re: Thailand flooding

 
 
Bruce
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      10-28-2011
Sounds very bad indeed. This factory makes all Nikon DX DSLRs:

START QUOTE

This is to advise you, following our first notice of October 11, of
the latest situations of submersion at Nikon (Thailand) Co., Ltd., a
consolidated manufacturing subsidiary of Nikon Corporation in the
Rojana Industrial Park in Ayutthaya Province located in Central
Thailand.

Damages

The 1st floor of all buildings at the premises are presently submerged
and the water level is as high as around 2 meters and there arose no
remarkable change since October 12. Operation of the factory has been
suspended since October 6. It is reported that there is no human
damage.

Estimated impact to our business performance

We still have difficulty to grasp the overall damages of our equipment
and facility since access to the premises continues to be prohibited.
We are now continuing our utmost to estimate the impact of the flood
to our group companies and business performance. We assure you to
immediately advise our findings once it is judged there will be an
important change in our forecast.

Recovery

We are unable to define how soon operation will be resumed. It will
take a certain time before the situation normalizes including
completion of water pumping out from the Rojana Industrial Park. We
have set up support system under the Emergency Headquarters for
Disaster Control headed by the president and will endeavor to restart
the operation as early as possible. Every possible measure is now
under preparation to resume production by means as purchase of new
manufacturing equipment, review of production assignment among whole
Nikon group companies. As for drainage from the industrial park, we
are requesting its acceleration to the Thai government, together with
the Rojana Industrial Park authority, other companies in the Park and
Japan External Trade Organization.

We deeply apologize you for any inconvenience caused by the disaster
such as short supply of our products.

END QUOTE
 
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Robert Coe
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      10-28-2011
On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <(E-Mail Removed)> wrote:
: Sounds very bad indeed. This factory makes all Nikon DX DSLRs:
:
: [Company statement omitted]

Seriously, how could this happen? If this were a mom-and-pop operation making
lens cozies or something, I could understand and sympathize. But for a
billion-dollar corporation, in a savagely competitive industry and with
important market share to protect, to set itself up with a single point of
failure in a critical product line is simply mind-boggling.

We've been ridiculing Olympus for the recent scandal that has hammered their
stock price. But really all they have to do is roll a few more heads, call in
competent independent auditors to sort things out, and put the issue behind
them. Evidently Nikon has no such option. This looks like management
malfeasance on a world-class scale.

Bob
 
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RichA
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Posts: n/a
 
      10-28-2011
On Oct 28, 7:11*am, Bruce <(E-Mail Removed)> wrote:
> Sounds very bad indeed. *This factory makes all Nikon DX DSLRs:
>
> START QUOTE
>
> This is to advise you, following our first notice of October 11, of
> the latest situations of submersion at Nikon (Thailand) Co., Ltd., a
> consolidated manufacturing subsidiary of Nikon Corporation in the
> Rojana Industrial Park in Ayutthaya Province located in Central
> Thailand.
>
> Damages
>
> The 1st floor of all buildings at the premises are presently submerged
> and the water level is as high as around 2 meters and there arose no
> remarkable change since October 12. Operation of the factory has been
> suspended since October 6. It is reported that there is no human
> damage.
>
> Estimated impact to our business performance
>
> We still have difficulty to grasp the overall damages of our equipment
> and facility since access to the premises continues to be prohibited.
> We are now continuing our utmost to estimate the impact of the flood
> to our group companies and business performance. We assure you to
> immediately advise our findings once it is judged there will be an
> important change in our forecast.
>
> Recovery
>
> We are unable to define how soon operation will be resumed. It will
> take a certain time before the situation normalizes including
> completion of water pumping out from the Rojana Industrial Park. We
> have set up support system under the Emergency Headquarters for
> Disaster Control headed by the president and will endeavor to restart
> the operation as early as possible. Every possible measure is now
> under preparation to resume production by means as purchase of new
> manufacturing equipment, review of production assignment among whole
> Nikon group companies. As for drainage from the industrial park, we
> are requesting its acceleration to the Thai government, together with
> the Rojana Industrial Park authority, other companies in the Park and
> Japan External Trade Organization.
>
> We deeply apologize you for any inconvenience caused by the disaster
> such as short supply of our products.
>
> END QUOTE


Isn't the flooding getting even worse as we write this stuff?
 
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Bruce
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      10-28-2011
RichA <(E-Mail Removed)> wrote:
>On Oct 28, 7:11*am, Bruce <(E-Mail Removed)> wrote:
>> Sounds very bad indeed. *This factory makes all Nikon DX DSLRs:
>>
>> START QUOTE
>>
>> This is to advise you, following our first notice of October 11, of
>> the latest situations of submersion at Nikon (Thailand) Co., Ltd., a
>> consolidated manufacturing subsidiary of Nikon Corporation in the
>> Rojana Industrial Park in Ayutthaya Province located in Central
>> Thailand.
>>
>> Damages
>>
>> The 1st floor of all buildings at the premises are presently submerged
>> and the water level is as high as around 2 meters and there arose no
>> remarkable change since October 12. Operation of the factory has been
>> suspended since October 6. It is reported that there is no human
>> damage.
>>
>> Estimated impact to our business performance
>>
>> We still have difficulty to grasp the overall damages of our equipment
>> and facility since access to the premises continues to be prohibited.
>> We are now continuing our utmost to estimate the impact of the flood
>> to our group companies and business performance. We assure you to
>> immediately advise our findings once it is judged there will be an
>> important change in our forecast.
>>
>> Recovery
>>
>> We are unable to define how soon operation will be resumed. It will
>> take a certain time before the situation normalizes including
>> completion of water pumping out from the Rojana Industrial Park. We
>> have set up support system under the Emergency Headquarters for
>> Disaster Control headed by the president and will endeavor to restart
>> the operation as early as possible. Every possible measure is now
>> under preparation to resume production by means as purchase of new
>> manufacturing equipment, review of production assignment among whole
>> Nikon group companies. As for drainage from the industrial park, we
>> are requesting its acceleration to the Thai government, together with
>> the Rojana Industrial Park authority, other companies in the Park and
>> Japan External Trade Organization.
>>
>> We deeply apologize you for any inconvenience caused by the disaster
>> such as short supply of our products.
>>
>> END QUOTE

>
>Isn't the flooding getting even worse as we write this stuff?



No, it isn't getting any worse where the factories are. Bangkok is
suffering badly with a steady increase in flood levels, but it isn't
getting any better at the factories, at least not yet.

The flood peak has apparently been reached near the factories (not yet
in Bangkok) but the water level in the rivers and canals hasn't gone
down sufficiently to allow water to be pumped out of the industrial
areas and into those rivers and canals. Any water pumped out would of
course only make things worse in Bangkok, so cannot be done yet.

There will need to be an investigation into what happened and the
reasons why flood defences were so comprehensively overwhelmed. In
particular, was it down to an extreme event, way beyond the capacity
of any flood defences, or inadequate design and/or construction of
those defences, or poor management of the river flood defence system
as a whole.

Outsiders looking in will want to know whether the standard of
protection against flooding was oversold by the politicians and/or the
developers who were keen to attract inward investment to Thailand.

 
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Robert Coe
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Posts: n/a
 
      10-28-2011
On Fri, 28 Oct 2011 14:32:37 -0400, "Neil Harrington" <(E-Mail Removed)> wrote:
: Robert Coe wrote:
: > On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <(E-Mail Removed)>
: > wrote:
: >> Sounds very bad indeed. This factory makes all Nikon DX DSLRs:
: >>
: >> [Company statement omitted]
: >
: > Seriously, how could this happen? If this were a mom-and-pop
: > operation making lens cozies or something, I could understand and
: > sympathize. But for a billion-dollar corporation, in a savagely
: > competitive industry and with important market share to protect, to
: > set itself up with a single point of failure in a critical product
: > line is simply mind-boggling.
: >
: > We've been ridiculing Olympus for the recent scandal that has
: > hammered their stock price. But really all they have to do is roll a
: > few more heads, call in competent independent auditors to sort things
: > out, and put the issue behind them. Evidently Nikon has no such
: > option. This looks like management malfeasance on a world-class scale.
: >
: > Bob
:
: It's a ****ing FLOOD, Bob. F-L-O-O-D, flood. "Management malfeasance" my
: ass.
:
: Sheesh.

They built the one factory making one of their most profitable and competitive
product lines in a flood plain. If that doesn't fit your definition of
management malfeasance, by all means have it your way.

Bob
 
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Irwell
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Posts: n/a
 
      10-28-2011
On Fri, 28 Oct 2011 15:27:04 -0400, Robert Coe wrote:

> On Fri, 28 Oct 2011 14:32:37 -0400, "Neil Harrington" <(E-Mail Removed)> wrote:
>: Robert Coe wrote:
>:> On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <(E-Mail Removed)>
>:> wrote:
>:>> Sounds very bad indeed. This factory makes all Nikon DX DSLRs:
>:>>
>:>> [Company statement omitted]
>:>
>:> Seriously, how could this happen? If this were a mom-and-pop
>:> operation making lens cozies or something, I could understand and
>:> sympathize. But for a billion-dollar corporation, in a savagely
>:> competitive industry and with important market share to protect, to
>:> set itself up with a single point of failure in a critical product
>:> line is simply mind-boggling.
>:>
>:> We've been ridiculing Olympus for the recent scandal that has
>:> hammered their stock price. But really all they have to do is roll a
>:> few more heads, call in competent independent auditors to sort things
>:> out, and put the issue behind them. Evidently Nikon has no such
>:> option. This looks like management malfeasance on a world-class scale.
>:>
>:> Bob
>:
>: It's a ****ing FLOOD, Bob. F-L-O-O-D, flood. "Management malfeasance" my
>: ass.
>:
>: Sheesh.
>
> They built the one factory making one of their most profitable and competitive
> product lines in a flood plain. If that doesn't fit your definition of
> management malfeasance, by all means have it your way.
>
> Bob


Like all those high rise buildings located on the San Andreas fault,
we all know a BIg one is coming.
 
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RichA
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Posts: n/a
 
      10-28-2011
On Oct 28, 3:17*pm, Bruce <(E-Mail Removed)> wrote:

> >Isn't the flooding getting even worse as we write this stuff?

>
> No, it isn't getting any worse where the factories are. *Bangkok is
> suffering badly with a steady increase in flood levels, but it isn't
> getting any better at the factories, at least not yet. *


To use a phrase I hate, "bottom line" the factories are the same as
waferfabs and other clean environments and when one of those got
flooded a few years back, it was a total write-off.

 
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Robert Coe
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      10-28-2011
On Fri, 28 Oct 2011 12:34:21 -0800, http://www.velocityreviews.com/forums/(E-Mail Removed) (Floyd L. Davidson)
wrote:
: Robert Coe <(E-Mail Removed)> wrote:
: >
: >They built the one factory making one of their most profitable and
: >competitive product lines in a flood plain. If that doesn't fit your
: >definition of management malfeasance, by all means have it your way.
:
: That's not a very clueful comment.
:
: Disaster/Risk management is a skilled art, and Nikon
: without any doubt has executive level management people
: who are very careful about what the company does.
:
: Your view is that the company should diversify the
: product or product lines that *you* are interested in;
: and frankly that would be an absurd tact for Nikon to
: take. Product lines are concentrated for efficient
: production and maximum profit.

I'm not interested in any of them. I'm a Canonian. My last Nikon was an F-2.
Various attitudes and prejudices may motivate my opinion on this subject, but
conflict of interest is not a factor.

: But didn't you notice that Nikon has major production
: facilities spread out in Japan, Thailand and China (at
: least, and probably other locations too)? The point is
: *not* to protect any given product, but rather to
: protect the investment of the stockholders.
:
: Losing a product for some period of time is acceptable.
: Losing the whole company is not, and making a profit is
: required. Nikon's diversification is clearly designed
: to protect Nikon integrity even in the event of multiple
: or wide spread disasters. Which is to say, at this
: point it is very obvious that they were indeed well
: prepared.

Unless press reports, and Nikon's own apologies, understate the gravity of the
situation, I'd say they're well prepared to lose market share to their
competitors over the next three to six months.

: My bet is that the more junior level executives at Nikon who
: were in charge of disaster planning are probably going to be
: the next generation of Senior Executives, simply because they
: have proven to be far sighted.

If you say so.

Bob
 
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Bruce
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Posts: n/a
 
      10-28-2011
Robert Coe <(E-Mail Removed)> wrote:
>On Fri, 28 Oct 2011 14:32:37 -0400, "Neil Harrington" <(E-Mail Removed)> wrote:
>: Robert Coe wrote:
>: > On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <(E-Mail Removed)>
>: > wrote:
>: >> Sounds very bad indeed. This factory makes all Nikon DX DSLRs:
>: >>
>: >> [Company statement omitted]
>: >
>: > Seriously, how could this happen? If this were a mom-and-pop
>: > operation making lens cozies or something, I could understand and
>: > sympathize. But for a billion-dollar corporation, in a savagely
>: > competitive industry and with important market share to protect, to
>: > set itself up with a single point of failure in a critical product
>: > line is simply mind-boggling.
>: >
>: > We've been ridiculing Olympus for the recent scandal that has
>: > hammered their stock price. But really all they have to do is roll a
>: > few more heads, call in competent independent auditors to sort things
>: > out, and put the issue behind them. Evidently Nikon has no such
>: > option. This looks like management malfeasance on a world-class scale.
>: >
>: > Bob
>:
>: It's a ****ing FLOOD, Bob. F-L-O-O-D, flood. "Management malfeasance" my
>: ass.
>:
>: Sheesh.
>
>They built the one factory making one of their most profitable and competitive
>product lines in a flood plain. If that doesn't fit your definition of
>management malfeasance, by all means have it your way.



I don't know about your part of the USA, but many key production
facilities are built in flood plains all over the world. Flood plain
land is cheap and flat, which makes it very easy to build a large
factory at an economic cost.

But flood defences need to be provided to reduce the probability of a
severe flood to an acceptably low level. You cannot reduce the
probability to zero, but a probability of 1% (or 2%) in any one year
is not untypical for housing - a 1 in 100 (or 1 in 50) chance of
flooding in any one year.

You would probably aim for a lower probability for key manufacturing
infrastructure such as the Nikon, Canon and Sony plants that are
affected, perhaps 0.1% or less in view of the serious consequences of
flooding.

In the Netherlands, the majority of the land is below sea level so the
standard of protection is higher again; one major breach of the
defences and a substantial proportion of that country's land mass
could be flooded*. So the figure generally used there is 0.08% - a 1
in 1250 chance in any one year - up from the previous standard 1%
which was shown by several serious flood events to be inadequate.

Thailand is flood prone because of the intensity of monsoon rains. The
topography and the pressure on provision of land for industrial
development means that the only economic sites for large manufacturing
plants are those in flood plains.

This is fine as long as an adequate standard of protection is offered,
but the standard of protection depends crucially on several factors,
including a very long dataset of historic rainfall/runoff data that
can be used with confidence, and a design approach that looks at the
whole catchment rather than just the individual site. This is
complicated by ongoing rapid series of developments changing the
characteristics of the catchment as a whole, so flood defence
designers may be trying to hit a constantly moving target, while at
the same time trying to keep up with ever more ambitious promises made
to inward investors by Thai politicians and their officials.

No doubt Nikon, Canon and Sony were all promised a very high standard
of flood protection for their sites. Only a detailed formal inquiry
will reveal whether that standard was in fact provided, and, if it
was, whether the rainfall event was so massive that it exceeded all
realistic predictions. On the basis of the information available so
far, we can only guess.

 
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Bruce
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      10-28-2011
RichA <(E-Mail Removed)> wrote:

>On Oct 28, 3:17*pm, Bruce <(E-Mail Removed)> wrote:
>
>> >Isn't the flooding getting even worse as we write this stuff?

>>
>> No, it isn't getting any worse where the factories are. *Bangkok is
>> suffering badly with a steady increase in flood levels, but it isn't
>> getting any better at the factories, at least not yet. *

>
>To use a phrase I hate, "bottom line" the factories are the same as
>waferfabs and other clean environments and when one of those got
>flooded a few years back, it was a total write-off.



If the Nikon factory is under 2 metres (six and a half feet) of water,
its contents are almost certain to be written off.

 
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