RISK MANAGEMENT

Is Your Company Prepared If the US and North Korea Go to War?

No, we’re not saying it is inevitable that Donald Trump’s and Kim Jong Un’s incendiary rhetoric will lead to all-out conflict. But CFOs need to take this eventuality into account as they continue helping to de-risk the organization.

The first thing to do, of course, is to know what is going on and assess the likelihood of the range of outcomes. Then the company should evaluate its vulnerabilities according to each scenario, including disruption to its supply chain – and take what preparatory action it can to deal with those vulnerabilities.

“North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen”

‘Fire and Fury’

At the moment, the conflict is still at the level of words. On August 8, Trump issued a stark warning: “North Korea best not make any more threats to the United States," he told reporters in slow and deliberate terms, his arms crossed in front of him. "They will be met with fire and fury like the world has never seen. He [Kim Jong-un] has been very threatening ... and as I said they will be met with fire, fury and frankly power, the likes of which this world has never seen before.”

A few hours later, North Korea called his bluff. The state-run KCNA News Agency carried a statement attributed to a military spokesman that it was “carefully examining” plans for a missile attack on Guam, a US territory in the Pacific.

“The KPA [Korean People’s Army] Strategic Force is now carefully examining the operational plan for making an enveloping fire at the areas around Guam with medium-to-long-range strategic ballistic rocket Hwasong-12 in order to contain the US major military bases on Guam, including the Anderson Air Force Base in which the US strategic bombers, which get on the nerves of the DPRK [Democratic People’s Republic of Korea] and threaten and blackmail it through their frequent visits to the sky above south Korea, are stationed and to send a serious warning signal to the US,” said the statement.

“The plan is to be soon reported to the Supreme Command soon after going through full examination and completion and will be put into practice in a multi-concurrent and consecutive way any moment once Kim Jong Un, supreme commander of the nuclear force of the DPRK, makes a decision,” added the spokesman.

“The execution of this plan will offer an occasion for the Yankees to be the first to experience the might of the strategic weapons of the DPRK closest.”

The next day, Trump tweeted: “My first order as President was to renovate and modernize our nuclear arsenal. It is now far stronger and more power than ever before . . .  Hopefully we will never have to use this power, but there will never be a time that we are not the most powerful nation in the world!”

In response, North Korean Gen. Kim Rak Gyom, commander of the Strategic Force of the Korean People’s Army, called Trump’s words “a bunch of nonsense” and reiterated the country’s plan to attack Guam. “Sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him,” the general said in a statement.

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