From the Street.
"The supplier of critical medical supplies used in surgery stopped shipping certain products with '00' expiration dates ... Hospitals short on supplies started calling like crazy."
Commentary Features: Back to the Future: Y2K Horror Stories
By Cory Johnson
Staff Reporter
11/10/97 7:07 PM ET
The Year 2000 crisis is no enigma wrapped in a mystery. Heck, it's not even much of a secret -- boatloads of computers won't work after Dec. 31, 1999. It's not all that complicated.
So why don't people seem to believe this thing? There were some 300 attendees at the recent SPG Year 2000 Conference and Expo in Dallas' Grand Kempinski hotel, and they're all working on their companies' Y2K problem. Previous shows had seen as many as 2,000 Y2K pros in attendance. But all too few are willing to talk about their own, real problems.
One reason for the silence is that tales of impending Year 2000 breakdowns are shrouded in issues of liability. Companies are afraid to admit their problems because if they don't get them fixed, what they admit to now could come back to haunt them later. "We've done estimates of the potential liability for Year 2000 problems," says Steven L. Hock, an attorney with Thelen, Marrin, Johnson & Bridges. "And we think damages could far outstrip the actual cost of all the Y2K fixes -- we're talking upwards of $500 billion."
But without anybody willing to talk on record about the problem, we reporters don't have much to go on, because we don't like to use unattributed anecdotes. Thus, the Year 2000 has become a silent killer -- a massive, broad-reaching problem that no one will admit to suffering from. "So many of my clients think they're the only ones going through this," says Bill Ulrich, a Year 2000 expert with the Tactical Strategy Group, an information technology consultancy in Silicon Valley. "So they don't want to admit it to their competitors."
So here are a handful of nameless, faceless and largely unattributed stories about Year 2000 problems. You don't have to believe them. You don't even have to read them. But a couple of years from now don't say you weren't warned.
Elevator Madness
"After 'fixing' all the elevators in our office building, my company ran a test on a Saturday morning to see what would happen if the date was set to January 1, 2000. All the elevators shut down and they couldn't get them started until the following Tuesday. And that's when we found out about a Federal OSHA [Occupational Safety and Health Administration] rule which says that if the elevators aren't operating, anybody who works above the third floor doesn't have to go to work."
-- a Year 2000 project office director of a Fortune 1000 company.
Millions in Seconds
"A story I like to tell is about a CIO who thought that his IS department was making a big deal about the Year 2000 problem. He called his operations manager and asked him to set the MVS clock to January 1, 2000, to see if any of the systems failed. He was in for a shock as a lot of database records got purged and archival data got wiped out in addition to systems failing. The damages were in several millions of dollars. I believe he was fired. This is supposed to be a true horror story."
-- Ravi Koka, the CEO of Seec (SEEC:Nasdaq)
Nuclear Standstill
"I heard about a nuclear power plant in Pennsylvania -- no, not Three Mile Island -- that was way ahead of doing its Year 2000 remediation and thought they were all finished. So they ran a test, setting all the computers to 12:00 a.m., January 1, 2000. And within 20 seconds, the entire reactor went to an automatic shutdown. It turns out there's an embedded system that does a measurement every 15 seconds of coolant flow, comparing the time the coolant hits two sensors about three inches apart. With the date change, it computed a negative flow from point A to point B and shut down the entire reactor. It wasn't a million dollar fix, but it took them three weeks to figure out what had happened."
-- a hedge fund manager with 60% of his portfolio in Y2K stocks.
Hold That Knife!
"The supplier of critical medical supplies used in surgery -- in one case it was special surgical gloves for people allergic to latex -- stopped shipping certain products with '00' expiration dates because the inventory control system considered them to have expired 97 years ago in 1900. Hospitals short on supplies started calling like crazy. Some surgeries were postponed."
-- an information technology consultant.
Swimming in It
"A soup company had a particular brand with a long expiration date -- vegetable mushroom or something. Anyway, some guy in the factory noticed that the stock of this vegetable mushroom was particularly low, so he went to the line and discovered that a quality control system was automatically dumping every can that came off the line stamped with an expiration year of '00.' There was a giant Dumpster full of a week's worth of vegetable mushroom soup, and the company had to buy a whole new quality control system for their production line."
-- from a Y2K consultant to the soup company.
Why Bother?
"A bank had a leasing unit that ran on 10 million lines of assembler code. It was a marginal business and they figured out that it would cost more to fix it than it they would make in the next twenty years. So they sold off the customer base to another bank rather than fix the Year 2000 packs."
-- Steven L. Hock, of Thelen, Marrin, Johnson & Bridges.
Happy Customers
"An equipment leasing company sent out standard five-year leases for signature by customers. Lease term extended beyond '00' and lease rates were calculated way too low as a result. Customers happily signed up and the company only recognized the problem when contracts were returned by customers and booked."
-- Hock
Where to Begin?
"A chief information officer with a big manufacturer in the Midwest came to us last year and said: 'I don't want to buy your tools to fix my Year 2000 problem just yet. I want to know if you can get me 10 interim people for about three months just to go through our company and let us know what computers and software they're using -- because I have no idea.' "
-- Tom Giemer, CEO of Accelr8 (ACLY:Nasdaq).
Back to the Future is an occasional column that chronicles the impact of the Year 2000 crisis.
c 1997 TheStreet.com, All Rights Reserved.
See Also
BULL RUN
Isn't It Ironic? Year 2000 Stocks Could Be Shelter From Stormy Markets
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Y2K Conference: Thinking Tools Provides a Graphic Glimpse at the Future
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BULL RUN
Y2K Conference: Accelr8 Adds to Its Arsenal
10/1/97 2 PM
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