7-May-10 1:00 PM EST

Firestorm Newsletter 7-May-10

May 7, 2010

Disaster Due Diligence May 7, 2010

Natural disaster

HEADLINE: Flooded Nashville faces long recovery

SUMMARY: As the Cumberland River recedes after widespread flooding this week in and around Nashville, residents and businesses are left to face a long recovery process. At least 27 deaths were blamed on flooding in the Southeast, 18 of them in Tennessee. Many of Nashville's iconic music institutions were hit hard, including the Country Music Hall of Fame and Grand Ole Opry. The city is also a trucking hub, with several major freight lines headquartered there.

STORY LINK: http://www.cnn.com/2010/US/weather/05/04/tennessee.flooding.deaths/index.html?hpt=C1

ANALYSIS: How many businesses in Nashville started the year with a continuity plan focused on a flood? A newscast showed a business owner evacuating his flooded building, leaving files and furniture behind while looking for a place to try to conduct business the next day.

If you lost access to your building what would you do? How would you do it? It may not be a flood, but there is a likelihood of something happening that could deny you access. About 20 percent of businesses will face a disruption each year. What can cause yours? Are you ready? Are your people ready?

--Jim Satterfield, Firestorm President/COO

Corporate security

HEADLINE: Large U.S. companies allocate less money to executive security

SUMMARY: The economic crisis has corporate boards examining executive perks for ways to cut costs. One expense that several U.S. corporations have reduced since 2008 is personal security for top executives, Marketwatch.com research reveals, despite the opposite trend for international companies, which face a greater threat for executive kidnapping.

STORY LINK: http://homelandsecuritynewswire.com/large-us-companies-allocate-less-money-executive-security

ANALYSIS: While their corporate security budgets have been reduced or eliminated, the threats facing executives are not decreasing. Once again the recent event of attempted terrorism this week in Times Square has illustrated how lucky we have been since 9/11/01. Another “Kramer Jihadist” was foiled by his lack of training or experience in bomb-making. The Mexican border situation does not seem to have peaked yet and shows no signs of any end in the near future. Workplace violence and its potential carryover to home justify a self awareness for executives that it is a dangerous world.

Executives need to be their own advocates and need to be better informed and more hands-on than before. Your own preparation and mindset are a big component to preventing and surviving an attack. From a corporate loss perspective, violence against an executive can impact shareholder confidence, company value, public relation challenge, ability to attract new executives, and more.

Some pointers to stay safe:

· Be careful of that GPS system in your car. All your personal stops can be copied off your GPS while you are at that special event for an hour or two. When kidnappers/attackers know the location of your home, children’s school, the office, the gym, your favorite watering hole, etc., they can act when you are most vulnerable. Most attacks happen extremely close to home or the office.

· Kidnappers/attackers don’t just show up and decide to act randomly. They plan and plan. While they are planning is when you need to be observant of your surroundings. Just making prolonged eye contact and pretending to take a digital picture of a person of interest can be enough for them to pick a softer target.

· Develop a situational awareness mindset: Have a security audit performed of your home, the landscaping around the home and immediate vicinity; conduct a personal and professional threat assessment; conduct a vulnerability assessment; have a plan in place for your home and your office and share your daily plans with your assistant; attend training courses; ask HR about conducting background checks according to your threat and vulnerability analysis.

· Choose a high quality, reputable company to assist you (make sure they specialize in executive protection). Good security is seldom obvious and rarely defeated.

· Mix up your work schedule, changing your departure and arrival times and routes a few times a week. When stopped in traffic or a light, make sure you can see the bottom of the tires of the car in front of you. That distance generally allows you enough room to cut the wheel and get out of that traffic lane.

· Take a professional level evasive driving course (most abductions happen around the car). Learn to use your car to your advantage and know how to reduce your vulnerability.

--Scott Watkowski, Firestorm franchise principal

Economic crisis

HEADLINE: Greek debt crisis on verge of 'going global': Pimco's El-Erian

SUMMARY: The CEO of the world’s largest bond fund warned that the debt crisis in Greece – site of street riots this week after economic austerity measures were approved – could easily spread to the rest of the world. Concerns that the Greeks would eventually default and exposure to its debt by U.S.-based banks added fuel to the theory that the crisis has a "transmission mechanism to go from country to region to global," said Pimco CEO Mohamed El-Erian.

STORY LINK: http://www.cnbc.com/id/36992469

ANALYSIS: If you happened to be watching CNBC on Thursday between 2 and 3 p.m., you saw the wide-eyed hosts trying to explain why the market dropped 10 percent, why Procter & Gamble went from $60 a share to $39, and you learned about something called a fat thumb, which if you have ever owned a Blackberry, you know what that means. Woven through what happened was the backdrop of rioting in Greece over austerity measures their government has passed in order to secure financing from fellow members of the European Union, the parent of the Euro.

The situation on Wall Street has apparently been attributed to a huge imbalance of sales orders that set off a set of cascading events mostly through electronic trading systems. While we will now be witness to finger pointing between the primarily electronic exchanges (NASDAQ) and the human and electronic exchanges (NYSE) as to why halting trading on one, even if only for seconds, forced the other to respond, the climate in which this occurred contributed to the event.

Greece has a huge debt and fiscal problem. That problem is spilling over into the rest of Europe and calling in question the long term viability of the Euro. If the Greeks bite the bullet and put in an austerity plan, they will pay an economic price. If they do not, if they force out their government, leave the Euro, or repudiate their debt, they will pay an even worse price. Their problems go to very fundamental issues – Greeks are tax avoiders to the point of lawbreakers. Solving their problems will take a long time.

Greece is symptomatic of the problems of several other countries, including Spain (their borrowing costs are now at all time highs), Portugal, Italy and others. That is why this is a bigger issue than simply one country roughly the size of New York State. It is also a potential preview of the challenges ahead for us in the U.S. That is why you should care.

Put a country in Europe in crisis with the potential to bring down several others, a crisis in the Gulf of Mexico from an oil spill, reports of a slowdown in economic activity in China, and a mistaken event in the financial markets like Thursday’s can become a full blown crisis. In these times, you need to keep your head while those about you are losing theirs (thank you Mr. R. Kipling). It is a keen grasp of the obvious that you can predict and plan for significant uncertainty and more events like these. It will be your performance in these times that will set you apart.

--Ted Hansen, Director, Firestorm Expert Council

Food safety

HEADLINE: E. coli forces lettuce recall; 19 ill in 3 states

SUMMARY: An E. coli outbreak possibly linked to tainted lettuce has sickened at least 19 people in Ohio, New York and Michigan, including students on three college campuses, prompting a recall throughout much of the country. Twelve of those sickened were hospitalized, three with life-threatening symptoms, the FDA said. The CDC said it was looking at 10 other cases probably linked to the outbreak. Freshway Foods said the lettuce was sold to wholesalers, food service outlets, in-store salad bars and delis; and the recall also affects "grab and go" salads sold at Kroger, Giant Eagle, Ingles Markets and Marsh grocery stores.

STORY LINK: http://www.google.com/hostednews/ap/article/ALeqM5hEnc00D5YgQjLxbZqLLkjOw_fwzgD9FI0FRO1

ANALYSIS: The convergence of convenience and technology has led to a seeming increase in the number of food-borne illness outbreaks in recent years. Sources of food now span the globe and the concept of items available “in season” has subtly grown quaint. As the production base and shipment channels have expanded, so too has the opportunity for contamination, typically at the source or in processing. In some cases, such as the cited lettuce contamination, the source is relatively easy to identify. In others, such as last year’s episode with salsa, the mystery can last for weeks and have a wide impact (many tomato farmers were forced to plow crops under, only to discover the source of the contamination was tainted jalapeños).

In this regard, folklore and your grandmother’s admonitions can serve you well. Washing even pre-washed produce can reduce risk of contamination. Conversely, undercooking can increase the risk of illness. The CDC estimates that 76 million Americans get sick, more than 300,000 are hospitalized, and 5,000 people die from food-borne illnesses each year.

While there is nothing quite like that runny egg for breakfast or a juicy hamburger later in the day, it is important to understand how we expose ourselves to risk. A wealth of information is available from http://www.cdc.gov/ncidod/diseases/food/index.htm. Barbeque season is upon us, in all its glory. Some simple precautions can make a world of difference. A popular police television show always advised “be safe out there.” It cannot be said any better than that.

--Don Donahue, Director, Firestorm Healthcare Response Team

Crisis communications

HEADLINE: Recalls threaten sterling Johnson & Johnson reputation

SUMMARY: Johnson & Johnson, viewed as one of the most trustworthy U.S. corporations, is in the midst of a series of recalls that include children's medications. U.S. regulators issued a report this week that said inspectors found thick dust, grime and contaminated ingredients at the J&J plant that produces Children's Tylenol and dozens of other products recalled last week. It is the fourth recall in recent months for the company. No serious injuries were reported in conjunction with the latest recall.

STORY LINK: http://www.cnbc.com/id/36982874