Product Recalls As Trade Barriers

Monday, January 19, 2009 10:32
Comments Off on Product Recalls As Trade Barriers

The summer of 2007 was a turning point for many as it was a time when everything “Made in China” was suspect. Barbie dolls, dog food, tires, and toothpaste were hitting the headlines worldwide, and the impact could not be denied.

Regardless of the responsibility that the firms themselves bore, the brunt of the brand damage was China’s, it was clear that brand “China” was in a loosing position no matter what because consumers really did not understand the global supply chain.. the media had an angle.. and the politicians had a bone to pick.

Through this time, what was interesting to watch because it was so disconcerting, was that the issue of quality could become an immediate trade barrier. That through a headline, a blog post, or a reference to a problem, a categorical judgment could be past.

Over time, the real stories began to come out – that it was Mattel’s own design that was flawed or that a distributor was looking to take advantage of the situation to roll out from under its own responsibility – and it appeared that the level of awareness at the consumer level was increasing.

However, in reading some headlines these days, I am starting to think that with the economic situation getting worse, the calls by the protectionists are not only pulling out the “buy American Card”, they are setting the stage for another round of “Made in China”

Recalls of Chinese Auto Parts Are a Mounting Concern, a December post on the NY Times Wheels blog, was the first article that caught my eye.

As the article suggests, there have been a rash of safety concerns with Chinese auto parts:

The complexity of today’s cars creates many possibilities for problems with imported parts: tire valves that break and let air escape; replacement window glass that does not meet the standards for tempered glass; high-intensity discharge headlight conversions that don’t meet federal standards.

There are so many automotive products coming in from China that American safety officials can’t keep track of them, said Clarence Ditlow, executive director of the Center for Auto Safety.

Mr. Ditlow has been researching recalls of Chinese auto parts in the National Highway Traffic Safety Administration’s records. Those recalls are now posted on the safety center’s Web site.

It was a post that drew out some really angry anti-China comments, with little based in reality, and it was when I went to the website that I began to understand that the author’s had once again built a story on a foundation of fear… not fact.

The CAS site, the source for the story, lists 21 various recalls related to automobiles whose parts were “Made in China”, and what is interesting to me is that (1) the dates of the recalls spane 2007 and 2008, with the large bulk occurring in 2007 (2) Of the groups initiating the recells (the US sellers), only 1 has a Chinese name. Many are US branded, US owned firms and (3) 1/3 of the recalls are for less than 500 cars

Clearly there were some causes for concern, but these issues pale in comparison to their Recalls by Manufacturer page in size, frequency, and concern.

Another article, Stork Craft recalls 535,000 baby cribs was equally slanted that covered 5 products being recalled:

1) Stork Craft Baby Cribs: 535, 000 units recalled:

The Consumer Product Safety Commission is aware of 10 incidents of support brackets that broke. In one incident a child was trapped between the mattress and the side rail with no injuries.

2)Taggies Sleep’n Play baby garments: 16,000 units recalled:

made in China and imported by Rashti & Rashti of New York, because the snaps on the garments can detach, posing a choking hazard to young children. No incidents or injuries have been reported.

3) Ryobi corded circular saws: Units recalled 12,400

the return spring on the product’s lower blade guard can break, posing a laceration hazard to consumers. No injuries or incidents have been reported.

4) Milan vanity stools by by Cheyenne Industries Inc.: Units recalled 89,000:

The company has received nine reports of broken or separated stool legs, including seven reports of minor injuries.

5) Roman shades by Cost Plus Inc. : Units recalled 692,400

No incidents have been reported with the blinds in this recall, but CPSC is aware of the deaths of three children involving similar styles of blinds and shades.

Now, I do not want to minimize the fact that all of the products above, and their defects, came with a higher level of risk than advertised and that consumers who purchased said products deserved a refund/ replacement, but a recall… much less coverage on MSNBC and NY Times.. is incredibly concerning for me.

Where I am most concerned is simply that these stories are coming out at a time when American consumers are already being told that “Buying American” is the way forward – even if that means boycotting Toyota (Made in America) vs. Motorola (Made in Tianjin).

It is also concerning because, the threshold is so low. Of the MSNBC items, a total of 19 incidents in TOTAL were reported – none serious – and a recall of over a million units is underway.

Now I am starting to get the feeling that the recalls themselves and the press coverage they are receiving have once again become political tools to set the stage for future policies.

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