US State Department: Y2K failures 'inevitable'

Year 2000 problem failures are inevitable both here and abroad and will disrupt global trade, the US State Department warned the Senate's special committee on Y2K last week.

"The global community is likely to experience some Y2K-related failures in every sector, country and region," said Jacquelyn Williams-Bridgers, inspector general of the State Department.

The year 2000 chiefs of major global corporations, who also testified today before the Senate committee, didn't dispute the State Department's grim assessment.

"The interdependency of the entire supply chain does represent the greatest risk to Ford," said George Surdu, director of technical services at Ford Motor Company. Of greatest concern was an extended infrastructure failure, such as electricity, gas and water, he said.

Executives from Ford, Philip Morris, Praxair and other companies who testified before the Senate today were proud of their Y2K efforts and didn't mind boasting about them. But those companies, which are developing contingency plans to deal with international problems, also made it clear that the Y2K problem isn't entirely in their control.

Despite the company's best efforts, Kevin Click, who heads Philip Morris' Y2K effort, said 700 of the company's "highly critical" business partners are likely to suffer Y2K-related failures. Most of those at-risk firms are located overseas, he said.

The company is stockpiling raw materials and finished goods, especially coffee and cocoa beans. It is developing work-around contingency plans with suppliers and moving finished products through the supply chain to bring them as close to the consumer as possible, Click said.

Industrialised countries are in the best shape to handle Y2K, Williams-Bridgers said. Problems are particularly severe in Eastern Europe, parts of Asia and Russia, she said.

Even in regions where computers aren't in wide use, Y2K is causing great concern among Washington policy makers. For instance, the State Department estimates that there is a 76 per cent chance the electric power will fail in Africa. Without power, airports, hospitals and other basic services may not operate.

"There is a huge humanitarian concern," Williams-Bridgers said.

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