Nikon statement re: Thailand flooding

Discussion in 'Digital Photography' started by Bruce, Oct 28, 2011.

  1. Bruce

    Bruce Guest

    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
    Bruce, Oct 28, 2011
    #1
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  2. Bruce

    Robert Coe Guest

    On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <> 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
    Robert Coe, Oct 28, 2011
    #2
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  3. Bruce

    RichA Guest

    On Oct 28, 7:11 am, Bruce <> 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?
    RichA, Oct 28, 2011
    #3
  4. Bruce

    Bruce Guest

    RichA <> wrote:
    >On Oct 28, 7:11 am, Bruce <> 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.
    Bruce, Oct 28, 2011
    #4
  5. Bruce

    Robert Coe Guest

    On Fri, 28 Oct 2011 14:32:37 -0400, "Neil Harrington" <> wrote:
    : Robert Coe wrote:
    : > On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <>
    : > 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 fucking 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
    Robert Coe, Oct 28, 2011
    #5
  6. Bruce

    Irwell Guest

    On Fri, 28 Oct 2011 15:27:04 -0400, Robert Coe wrote:

    > On Fri, 28 Oct 2011 14:32:37 -0400, "Neil Harrington" <> wrote:
    >: Robert Coe wrote:
    >:> On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <>
    >:> 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 fucking 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.
    Irwell, Oct 28, 2011
    #6
  7. Bruce

    RichA Guest

    On Oct 28, 3:17 pm, Bruce <> 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.
    RichA, Oct 28, 2011
    #7
  8. Bruce

    Robert Coe Guest

    On Fri, 28 Oct 2011 12:34:21 -0800, (Floyd L. Davidson)
    wrote:
    : Robert Coe <> 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
    Robert Coe, Oct 28, 2011
    #8
  9. Bruce

    Bruce Guest

    Robert Coe <> wrote:
    >On Fri, 28 Oct 2011 14:32:37 -0400, "Neil Harrington" <> wrote:
    >: Robert Coe wrote:
    >: > On Fri, 28 Oct 2011 12:11:16 +0100, Bruce <>
    >: > 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 fucking 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.
    Bruce, Oct 28, 2011
    #9
  10. Bruce

    Bruce Guest

    RichA <> wrote:

    >On Oct 28, 3:17 pm, Bruce <> 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.
    Bruce, Oct 28, 2011
    #10
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