Bad Chinese Tires And More
Must read story in today's Wall Street Journal entitled, "Accident Raises Safety Concerns On Chinese Tires." To summarize, an American tire "distributor" imported about 450,000 Chinese SUV and truck tires and it now appears many of them may have been dangerously defective. Company appears to have been slow to learn of the problem and then slow to report the problem once it learned of it and is now claiming not to have enough information or money to mount a recall.
Foreign Tire Sales Inc. (FTS) of Union, New Jersey distributed the tires and sold them under the brand names Westlake, Telluride, Compass and YKS for sport-utility vehicles, pickups and other light trucks. All were sold as replacement tires, not original equipment. In FTS's own words:
FTS said an unknown portion of the tires either lacked a safety feature designed to make them more durable or had it in an insufficient degree. The company, which said it doesn't have the money to pay for a recall, estimates the defect could be present in as many as 450,000 tires imported from China's Hangzhou Zhongce Rubber Co. since 2002. It said it believes other U.S. distributors have been selling virtually identical tires, which could account for as many as an additional half-million tires.
According to the article, "FTS knew about the tire defect, which it reported to the National Highway Traffic Safety Administration earlier this month, as early as last year -- when it conducted its own tests in the wake of an accident in New Mexico that didn't result in any serious injuries or deaths."
Last August, there was a fatal wreck where the tread allegedly separated on a tire, killing two people.
FTS has made a filing with the National Highway Transportation Safety Association (NHTSA) that, according to a senior associate administrator at NHTSA, "indicates they have a safety defect and an obligation to recall. " This NHTSA administrator added that "We're just outraged it's taken this long to get to this point," he added, "because they knew that they had this problem for some time."
FTS "has told NHTSA it doesn't have the money to pay for a recall, [and] it said it can't even clearly identify the tires affected because the Chinese manufacturer has failed to provide it with the identification numbers of the tires that were made with the missing safety feature.
FTS has filed a lawsuit in the United States against the Chinese tire manufacturer, Hangzhou Zhongce, accusing it of removing the safety tread. The distributor's
Surprisingly, FTS's own lawyer, Lawrence Lavigne, admits "FTS suspected a problem as early as 2005, when it noticed a significant increase in claims from consumers for compensation. This typically arises when consumers are dissatisfied with the performance of a tire and return it for a refund or replacement. He contends the Chinese manufacturer initially insisted the tires were built to the specifications and only much later admitted they had been altered."
The plaintiffs' lawyers in cases against FTS will probably be asking questions of FTS similar to these:
- Did you just go with what your Chinese supplier was telling you about the safety of its tires? Why?
- Did you do anything to test the tires yourself? When did you do this testing? Why not any time before then?
- What made you first suspect problems with the tires? What did you do in response to this? Why did you wait until then? Did you immediately contact the government? If not, why not? Did you immediately cease importing them? If not, why not?
- What did you do to make sure the tires you were getting matched the specifications you required?
- What specifications did you require of the Chinese tire manufacturer? Is this in your contract with them?
- Who at FTS first knew about the safety problems with the tires? What did that person do to try to remedy things? Who at FTS made decisions on tire testing?
- What would it have cost FTS per tire to fix the problems?
I suggest all companies involved in bringing product into their country from China read my earlier post, entitled "How To Protect Your Company From Bad China Product," on how to try to prevent such problems.
Comments (10)
Read through and enter the discussion by using the form at the endnanheyangrouchuan - June 27, 2007 8:17 AM
So, FTS had suspicions and did nothing! Bury them! Strip their bank accounts and seize their homes if they don't have enough money. What a sad excuse, and all in the name of "globalization".
What kind of pathetic excuses and horrible suffering will we here when Chinese death boxes aka chinese cars arrive in the US and EU?
Have you seen these things in EU crash tests? Not since the Model T have cars utterly disintegrated on impact.
Twofish - June 27, 2007 1:10 PM
FYI, Hangzhou Zhongce claims that there is nothing wrong with the tires
nanheyangrouchuan - June 27, 2007 4:24 PM
Yeah, all of those european, american, korean and japanese brand tires all have the same problem.
And there is nothing wrong with radiator fluid in toothpaste or medicine either.
China Law Blog - June 27, 2007 10:15 PM
nh --
Ah, back to your old self. Cars today are so much safer than yesterday, it isn't even funny. It appears this is more of a case of sloppiness than globalization. Do you really think something like this would not have been possible without China?
China Law Blog - June 27, 2007 10:18 PM
TwoFish --
Yes, I realize that and it is certainly too early to know. But, if the tires are not bad, I would not be expecting FTS to have reported them to the government, I would not expect the government to recall them, I would not expect the government to be angry about being informed late, and, probably most importantly, I would not expect a company (FTS) sued for bad tires to essentially admit they are bad. At this point, I think it fair to say that it certainly appears there was something wrong with at least some of these tires.
China Law Blog - June 27, 2007 10:19 PM
nh --
Right.
Joseph Wang - June 28, 2007 7:13 AM
If FTS only started to blame Hangzhou after it was sued for bad tires in May. If FTS can blame Hangzhou then it is off the hook for the lawsuit.
Also, as far as I can tell from the NTSB recall process, the NTSB doesn't check the necessity of a recall initiated by manufacturer reports on the theory that a manufacturer wouldn't order a recall spurtiously. However, in this case FTS has a very good reason to order a recall.
FTS can threaten to recall the tires and bankrupt itself as part of a legal strategy to deal with the initial tire lawsuit. FTS goes to the plantiffs and tell them that if they don't settle and try to argue in court that the tires are defective, that FTS will order a recall, bankrupt itself, and the plantiffs will get nothing. This puts pressure on the plantiffs to settle the lawsuit and not to go to trial.
Joseph Wang - June 28, 2007 7:15 AM
nan:
And so if one Chinese company makes defective products, then they must all do. If Chinese toothpaste is bad, then Chinese tires must be.
The fact that we have laws and a legal system is because reality doesn't work that way.
nanheyangrouchuan - June 28, 2007 12:44 PM
"organic" broccoli from China:
http://www.netscape.com/viewstory/2007/06/27/about-that-organic-broccoli-from-china/?url=http%3A%2F%2Fgristmill.grist.org%2Fstory%2F2007%2F6%2F27%2F74036%2F7367
About that organic broccoli from China
Posted by Samuel Fromartz at 1:29 PM on 27 Jun 2007
Read more about: food | agriculture | organic food | legislation
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Organic food has take criticism lately, because a portion is flowing from overseas. (All those food miles, all that lost support for American farmers.) Well, there's a reason that trend is underway: Not enough American farms are growing organic crops and fewer still are converting, so demand is exceeding supply. With the Farm Bill, attempts are underway to address that problem.
The organic farming community is seeking a few tender morsels off the Congressional table, to help farmers get into the organic sector. I explained these on Chews Wise, with links to more in-depth documents, but the main points are these: Organic farmers seek research, so growers can more easily figure out how to farm organically, and funds are needed to offset the costs of certification and aid farms through the difficult transition period.
* Basic research funds. Currently organic farming research only gets about $3 million in dedicated funds out of a USDA research budget of about $2 billion. They want $15 million.
* Certification cost share. Farmers can get up to $500 annually to offset up to 75 percent of the costs of organic certification, but much of that money has run out. (This $500-per-farm subsidy is the only one specifically for organic farmers and is aimed at smaller operations.)
* Transition support. The lobby is looking for $50 million per year to help farmers with the three-year transition to organic farming.
Environmental Working Group recently launched a site to gin up support on the issue and generate 30,000 signatures to lawmakers by July 15. The point is to win baseline funding for organic agriculture, so that it can be increased in the next farm bill. If the baseline is near zero, it isn't going to move at all -- not in the next bill, or the one after that -- and farmers will continue to sit on the sidelines.
When you wonder why organic products are coming from overseas, you will have your answer: the modest government incentives and research U.S. farmers needed to pursue organic farming weren't available. So they didn't bother to switch.
don little - July 26, 2007 8:05 AM
Do you know of any lawyers that i can get too help me out from under these tires?