Academic

VOLCANO ASH CLOUD SETS OFF GLOBAL DOMINO EFFECT: While the volcanic ash cloud covering parts of E?

By Glenn Reynolds

VOLCANO ASH CLOUD SETS OFF GLOBAL DOMINO EFFECT:

While the volcanic ash cloud covering parts of Europe continues to wreak havoc for airlines – costing the industry more than $1 billion as of Monday – grounding most of the continent’s air travel for several days has had a ripple effect extending far beyond Europe’s borders.

The following is a collection of international anecdotes demonstrating how the ash cloud has done more than hit airlines’ bottom lines and inconvenienced air travelers.

? The lack of refrigeration facilities at the airport in capital of the West African nation of Ghana has been a big blow to pineapple and pawpaw farmers who sell to Europe because of the lack of flights. As of Tuesday, no cargo flights have taken off yet. . . .

? In Kenya, thousands of day laborers are out of work because produce and flowers can’t be exported amid the flight cancellations. Kenya has thrown away 10 million flowers – mostly roses – since the volcano eruption. Asparagus, broccoli and green beans meant for European dinner tables are being fed to Kenyan cattle because storage facilities are filled to capacity.

? The U.S. Travel Association estimates that the ash cloud produced by the eruption has cost the U.S. economy $650 million, approximately $130 million per day. That kind of loss to the economy affects the cashflow to fund about 6,000 American jobs, the association said. Every international flight bound for the U.S. is worth an average of $450,000 in spending from travelers, which the association says pays for five jobs per flight.

? Nissan Motor Co.’s production at a line at its Oppama plant near Tokyo and two lines at its Kyushu factory in southern Japan will stop all day Wednesday because the planned shipment of tire pressure sensors from Ireland has not arrived, company spokeswoman Sachi Inagaki said. The suspension would affect nearly 2,000 vehicles, including the Cube compact made at the Oppama plant, and the Murano and Rogue crossover SUV models produced at the Kyushu plant as well as eight other models that are produced on the same production lines, Inagaki said.

? BMW North America spokeswoman Jan Ehlen told the Herald-Journal of Spartanburg on Monday that the automaker will likely reduce production at the BMW plant in South Carolina because of a shortage of supplies, but shouldn’t have to shut the plant down. BMW uses planes to ship transmissions and other components from its German factories to South Carolina. The Greer plant makes BMW’s X5 and X6 sport utility vehicles.

There’s more at the link but this kind of thing underscores how tightly-coupled the global economy has become. That goes with the point about “resilience” made at the end of this piece in the WSJ and in this piece, and this one, from Popular Mechanics. Bottom line is that failures in one part of the global economy can cascade throughout. Too much of our technological and economic infrastructure is designed with good times in mind, and not enough thought goes into how it will function when things are rotten. Yet, frequently, changes needed to add more resilience to the system are fairly modest, if they’re made in advance. Just a thought. . . .

Full post as published by Instapundit.com on April 22, 2010 (boomark / email).