Who’ll Stop the Rain?

Mother Nature is business's biggest saboteur.

Comparatively few CFOs in Asia have been as directly affected by the incomprehensible tragedy of late December, which killed nearly 200,000 people. Hardly any large manufacturers have a commercial presence in the devastated coastal areas, which were mostly home to fishing communities. Neither do outsourcers in Malaysia or India. “The factories, high-tech research centers, and ports that drive Asia’s growth escaped largely unscathed…,” the Asian Development Bank noted in a report.

But the devastation inevitably raises the question: Could such a thing happen here? After all, the coastal regions in the United States are home to low-lying financial and technology hubs that fuel the national economy, including New York, Boston, and San Francisco.

The answer to the could-it-happen-here question seems to be maybe. Companies on the West Coast are clearly at greater risk, geologists say, since the Pacific Ocean—particularly the area off of the northwest coast—is more tectonically unstable than the Atlantic. Admittedly, the risk is small (probably a 500- to-1 shot) in and around the Cascade region, and wave activity in the Pacific is monitored by the Hawaii-based Pacific Tsunami Warning Center. But early warnings won’t help companies move factories or facilities. One study found that waves reaching half a mile inland would cause $7.6 billion of damage in the San Diego area alone. In fact, a warning might give employers just a few minutes to evacuate workers to higher ground.

Tsunamis triggered by landslides pose a more likely threat to New York and Boston. Last year, researchers uncovered such a rift-in-the-making off the coast of North Carolina. So-called landslips can also occur during volcanic eruptions. Some geologists believe a future eruption of Cumbre Viejo (a fissured volcano on the Canary Island of La Palma) could send a granite slab the size of Manhattan plunging into the sea. That, they say, might generate a tsunami so huge it would submerge a seven-mile strip of coastline running from Boston to Miami.

More good news: Astronomers point out that a celestial object crashing into an ocean would trigger an even more catastrophic wave. Ominously, an asteroid dubbed 1950 DA is currently on a collision course with the earth. According to one recent simulation, if it landed in the Atlantic, 1950 DA would create a 12-mile cavity in the sea. Within several hours, 328-foot waves would break on the East Coast.

But unless your board is committed to serious long-term planning, don’t relocate headquarters quite yet. Cumbre Viejo has been silent for 56 years, and landslips on La Palma happen about once every 100,000 years. As for 1950 DA: the asteroid, which has a 0.3 percent chance of crashing into earth, isn’t scheduled to show up until 2880. By that point, the average human lifespan will be 342 years, Alpha Centauri will be a vacation getaway, and researchers will finally be close to solving the riddle of male pattern baldness.—Cesar Bacani & J.G.


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