Success Stories
Seismic Retrofitting Avoids Business Disruption Anheuser-Busch operates a large brewery just a few miles from what became the epicenter of the Northridge Earthquake on January 17, 1994. In light of the area’s high earthquake hazard, Anheuser-Busch had initiated a risk-reduction program at the brewery in the early 1980’s. A risk assessment of critical buildings and equipment was performed, and those with unacceptable levels of risk were seismically upgraded over time without adversely affecting daily operations. Because of the mitigation actions, the plant incurred only minor damage when the earthquake struck. Anheuser-Busch conservatively estimates that, had seismic strengthening not been performed, direct and business interruption losses at the brewery could have exceeded $300 million. According to Anhauser-Busch, this is more than 15 times the actual cost of the loss control program. Clearly, this loss reduction program paid for itself. While this is but one example, it strongly indicates that mitigation measures can strengthen corporate balance sheets. (FEMA)
Case Study in Risk Assessment: The Business Community and Water Works If you could invest $14 million in your community to save $300-400 million, you would do it, wouldn’t you? No, it isn’t a trick question. It is the financial basis for the reason communities need to identify the risks they face.
During the 1993 Midwest Floods, the City of Des Moines, Iowa, suffered extensive damage to the Des Moines Water Works after floodwaters entered the facility. Because the treatment plant and associated equipment were under floodwater, the plant could not operate. More than 250,000 customers were without water service for 11 days.
In addition, the business community was devastated. Although only a small percentage of the businesses n Des Moines reported closing due to direct flood damages, more than 40 percent of them were closed for some period of time due to the lack of water service. Even businesses that did not rely on water for production or operation were forced to close for health, sanitation and fire safety reasons. A large percentage of area businesses remained closed until water service was restored. This resulted in a reduction of staff productivity and product inventory, as well as a loss of sales revenue. In addition, tax revenue was lost and the workforce suffered depressed wages.
The damage incurred cost $14 million to repair. The business losses in Des Moines were estimated at between $300-400 million – a staggering comparison. This experience illustrates how utility-related or lifeline disaster costs often stretch well beyond the physical damage. It exemplifies that communities need to implement hazard reduction measures to protect the lifeline services that are critical to businesses and other functions of the community.
The idea behind risk assessment may be simple, but its results are powerful: target your lifelines before Mother Nature does it for you.
(FEMA)
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The Undeniable Benefits of Risk Reduction Perhaps it is best to let FEMA Director Witt, in his own words, illustrated the positive power communication can have in your disaster resistance effort. After the 1994 Northridge earthquake, he shared the following story:
"As I have talked with people in many neighborhoods affected by this earthquake, I have met people committed to rebuilding their communities, schools and their businesses. While visiting a particularly hard-hit area with Hilary Clinton, I noticed a house that seemed to be in much better shape, both inside and out, than others around it. I talked with the homeowner and asked they gentleman why he had fared so much better. He told me that he had received a video tape that showed how to protect a home against earthquake damage. He learned how to secure appliances, such as strapping his water heater, and how to secure bookcases and other items in his house that could topple and cause injury. It worked, and the man and his family were spared much of the anguish that his neighbors were experiencing."
Perhaps your greatest responsibility and challenge in this effort will be to make sure as many people as possible hear about the benefits to hazard reduction so that they can replicate the success of this homeowner.
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The Difference One Generator Can Make David Thompson had the foresight to purchase a generator for his gas station in Cambria to protect himself from having to close his business due to possible power outages, fire or flooding. And has he ever put this generator to good use.
Periodically, as we all have experienced, the power is shut down. Inevitably, it’s the worst possible time for it to happen. But David avoids that possibility and all the headaches that go along with it. He can not only double his volume of business, but he brings peace of mind to his community by providing a most essential service -- gas for the Fire Department’s engines and for their local hospital’s ambulance.
After a recent flood, he was the only gas station that remained open within a radius of 30 miles while the other stations remained closed for two weeks. He didn’t lose a day of business and his customers remain grateful and loyal to this day. Hats off to you, David! (Chevron)
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