Year 2000 computer fears bring out survival instinct
November 1, 1998
BY HOWARD WOLINSKY BUSINESS REPORTER
When Jim Janecek discusses Y2K, he doesn't talk about making sure his computer operates when the new millennium arrives so he can get on the Net.
Janecek talks about survival.
Like a growing number of Americans, he is unconvinced by assurances that power and food will be available and banks will be running smoothly if Year 2000 glitches crash the fragile computer network that delivers everything we take for granted.
At an expense of up to $20,000, Janecek is laying in enough food to last at least half a year, installing a backup power generator, ordering a water filter, stockpiling toilet paper and taking other steps to ensure that his family makes it through come what may.
Janecek will tell you that he's 40 and that he runs a Chicago advertising special effects business. But he won't tell you where he lives because he doesn't want hungry mobs showing up at his door when 2000 arrives.
Janecek doesn't see himself a survivalist, but it's clear that a Y2K survivalist movement is fueling the biggest boom in the emergency-preparedness industry since the Persian Gulf War in the early 1990s and the energy crisis in the mid-1970s.
Demand has been growing in recent months for items that millennium survivalists consider essential. These include dehydrated and freeze-dried foods, milling machines in case of food shortages, backup generators and hand-cranked radios in case of blackouts, water-purification systems in case the water systems fail and gold and silver coins in case of cash shortages or bank failures.
Some items already are backlogged or in shortages. And demand is expected to build in January, 1999, as people become acutely aware the next millennium is quickly approaching.
Experts have tried to assure the public that the technological problems will be quickly sorted out. But even before we find out whether the Y2K bug is a major problem, the fear of it may create its own major problem if panicky people empty grocery shelves and start taking their money out of banks.
Computer programmer Glenn Susz, 42, is convinced there are problems ahead.
''I am not running to the hills or digging a hole in my backyard--yet,'' said Susz, one of the directors at Sterling Software Services Inc. in Burr Ridge.
But Susz has installed a gasoline-powered backup generator at his southwest suburban home, set aside extra cash and has on hand several weeks' supply of canned food. He also has a cache of Lindy's Chili, a local delicacy that recently became available in 12-ounce microwave-ready containers.
And he has a handgun locked in his safe.
Susz said he expects major corporations to be ready for Y2K, but not the small companies that are their suppliers.
''The manufacturer of macaroni might be fine, but the company that makes its boxes won't be,'' he said. ''The freight and rail companies are notorious for being antiquated.''
As a result, he expects small problems to create larger ones.
''I don't expect total chaos, but there will be enough things happening over the three to four months after Jan. 1, 2000, that it's common sense to be prepared,'' he said.
He compared his preparations for Y2K-related disruptions to being ready for natural disasters.
''We have enough problems here with power disruptions,'' he said. ''I didn't want to wait for overreactions to Y2K. If there is a shortage of milk, people will buy more. If some banks are illiquid, people will overreact. The psychology of the crowd will cause all kinds of problems.''
Janecek has the same kind of worries about small problems turning into big ones.
''I am preparing for what may be a large civil defense problem,'' he said.
''When the Bulls win a championship, a bunch of people riot and break into stores. What will happen if a bunch of people's power goes off and they can't get any heat?''
Janecek said he hasn't convinced everyone he knows--''my wife humors me''-- but he insists he's on solid ground.
''I don't consider myself a survivalist. I am not preparing for an invasion or nuclear war. I don't like guns and camos. I just like to eat. I look at what I am doing as an insurance policy.''
Many emergency-preparedness companies have been caught flat-footed by Y2K-spawned demand.
As for the water filter that he ordered, Janecek said, ''the Swiss manufacturer cannot keep up with demand.''
Just a couple months ago, Kohler Power Systems, a division of a company best known for its fancy bath fixtures, began to notice that demand for its backup generators for homes was surging.
Len Rubens, manager of North American sales for the Koh-
ler unit in Mosel, Wis., said: ''Demand is absolutely up. [October] was wild. It's been off the charts. Orders are up 100 percent over the past two months.''
He described a seminar in Texas where Y2K preparations were discussed and a half-dozen participants shelled out $5,000 to $10,000 for home generators.
Though he is happy for the sales, Rubens doesn't buy ''all that gloom and doom with worldwide chaos.''
He doesn't even have a backup system in his own home. ''This will be a short, little blip, a bump in the highway, for a year, a year and a half,'' he said. ''I don't think there will be a mass panic. People have common sense.''
At Walton Feed in Montpelier, Idaho, one of the largest sellers of freeze-dried and dehydrated foods, orders are backing up.
Steve Portela, manager of Walton Feed, said the company is just now filling orders from early June. And if customers want to pick up large lots of food items from Walton's truck dock, slots are booked until April.
Portela said the bulk of his customers for emergency foods traditionally have been his fellow Mormons, whose religion calls on them to set aside a year's supply of food. But with the concern about Y2K, he has seen a dramatic increase in the number of non-Mormon customers. In the past, about 60 percent of his buyers were Mormons; now they are about 10 percent.
Millennialists are buying huge quantities of food. Portela said he has sold as much as $400,000 in food to an extended family.
''During the past few weeks, we have taken a flood of orders, and it's hard to forecast exactly what this will do to the lag time for orders being placed now,'' he said.
Walton's sales for the first six months of this year equaled those for all of 1997.
David Kuntarich, president of Crown Point-Sopakco Sales in Mullins, S.C., makers of military-style rations, said his company is four to eight weeks behind in filling orders.
''I'd like to say our sales increased because we're so smart. But over the past 10 months, there has been a noticeable increase because of people concerned about Y2K,'' he said.
Harlan Berk, owner of the downtown Chicago coin dealership Harlan J. Berk Ltd., said: ''I've been in this business for 34 years. These trends come and go. And we are just starting to see a trend now [in millennium-inspired sales]. There is something in the human mind about even numbers--70 home runs, year 2000. 1999 is going to mean a lot, because people will be looking the year 2000 in the face.''
During the last four months, his store has sold $3.5 million in gold coins. Ordinarily, he would sell $100,000 in these coins.
He said demand is big for British gold sovereigns--a la James Bond--and 20-franc coins from Belgium, France and Switzerland. One sovereign sells for about $90 and contains a quarter ounce of gold. Discounts are available for larger quantities.
These coins are more popular than those containing a full ounce of gold because they are more affordable and easier to exchange if there is a shortage of cash or the banking system goes down.
Berk said survivalists in the past loaded up on silver dimes.
''This time around, people seem to have more money,'' he said. ''I think they want to own gold. Concerns about Y2K provide them with the justification they need to buy it.''
Lou Marcoccio, a Y2K expert at the GartnerGroup, said his surveys have shown consistently during the last 18 months: that 40 percent of computer professionals and 28 percent of the general public intend to withdraw three weeks to eight weeks worth of cash because of fears of bank problems caused by Y2K.
To cover increased demands for cash, the U.S. Federal Reserve last summer increased available cash from $150 billion to $200 billion.
Mike Fowler, vice president of operations at Uncle Dan's Great Outdoor Stores, which has three military surplus stores in the Chicago area, said that whenever public fears about safety rise, sales of survival items increase.
''People are buying for the millennium,'' he said. ''It's fueled by the Internet.''
Fowler said orders have increased in his stores in recent months for ready-to-eat meals, $50 water purification systems that make even raw sewage potable and $20 gas masks.
Gas masks? The more extreme survivalists envision nightmare scenarios with attacks with poison gas and biological weapons. But Fowler said his store sells the masks only as a novelty item and makes no claims for them--although they are Israeli government surplus, left over from the Gulf War.
''We don't know if people are buying them for survival or just for Halloween,'' he said.
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Many experts say Y2K survivalists are going overboard.
''It's totally crazy to stock up on food and guns and to withdraw large amounts of cash,'' said Lou Marcoccio, Y2K research director at the GartnerGroup. ''Our infrastructure is not going to fall apart.''
Try telling that to the elderly woman who called David Kuntarich, president of Crown Point-Sopakco Sales in Mullins, S.C., makers of military-style ready-to-eat rations.
''She had been cruising the Net and getting worked up over the disaster that she thought Y2K problems were going to cause. She wanted to buy enough [military rations] for herself and her family. She thought she was calling too late to get what she needed.''
Kuntarich, a native of Crown Point, Ind., said, ''I told her that it was nice that she was taking steps to protect her family. I told her there might be problems, but they would not be severe. I told her to shut off her computer and stop worrying.''
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