Product Recalls

 

 

 

 

 

 

 

 

Prepared for:

 

Brian N. Craig, PhD, CPE

Lamar University,

Assistant Professor –Department of Industrial Engineering

2208 Cherry Engineering Building

Beaumont, TX 77710

 

 

 

 

Prepared by:

 

Anshu Srivastava

 Brent Martin

INEN 4316/ENGR 5386

Summer 2002

Lamar University, Beaumont TX 77710

Table of Contents:

 

Executive Summary………………………………………………………………………..1

Introduction……………………………………………………………………………………..1

Objective………………………………………………………………………………………….1

Methods……………………………………………………………………………………………2

Results……………………………………………………………………………………………..2

Conclusions………………………………………………………………………………………9

Recommendations………………………………………………………………………….10

References………………………………………………………………………………………12

Appendix-1……………………………………………………………………………………..13
Executive Summary:

Unsafe products in the hands of consumers are a risk to life and property. Product safety laws and government agencies enforcing these laws keep a check on the manufacturers. Products are recalled from the market if they are reported to be unsafe.

This report presents the steps involved in carrying out a product recall under the guidelines issued by the Consumer Product Safety Commission (CPSC) and the National Highway Traffic Safety Administration (NHTSA). The report concludes with a discussion of the role of a recall–coordinator and discusses record keeping guidelines for successful product recalls.

 

Introduction:

Unsafe products can cost million of dollars in terms of liability suits and penalties against a company. Understanding the laws, and the procedures of the enforcement agencies will help a company to make informed and timely decision regarding product recalls.

 

Objective:

To highlight the importance of product recalls and present the steps involved in carrying out a product recall.

 

 

Method(s):

An Internet search for “product recalls” presented a broad range of information from -product recall alerts, product liability cases, government acts, standards associations, and government agencies enforcing product safety. For the purpose of this study, two agencies -CPSC and NHTSA were narrowed down and studied for their guidelines on carrying out a product recall. Examples of product recall notices issued by CPSC were collected. The Firestone Tire recall was studied from the perspective of NHTSA guidelines.

 

Results:

There are various agencies that have jurisdiction on product safety and recalls. The following table presents a list of products and the corresponding government agencies responsible for any safety issues.

(CPSC Website, 2002)

 

This study will discuss Product Recalls by focusing on two agencies: the Consumer Product Safety Commission (CPSC) and the National Highway Traffic Safety Administration (NHTSA).

Consumer Product Safety Commission (CPSC):

“The U.S. Consumer Product Safety Commission (CPSC) is an independent regulatory agency responsible for protecting the public from unreasonable risks of injury and death associated with consumer products.” (Consumer Product Safety Act, 1972). “CPSC has jurisdiction over approximately 15,000 different types of products used in and around the home, in schools, and in recreation. CPSC administers five statutes passed by Congress. They are:”

1.    Consumer Product Safety Act (CPSA),

2.    Federal Hazardous Substances Act (FHSA),

3.    Flammable Fabrics Act (FFA),

4.    Poison Prevention Packaging Act (PPPA), and

5.    Refrigerator Safety Act (RSA).

CPSA Product Recall Reporting:

“Consumer Product Safety Act establishes reporting requirements for manufacturers, importers, distributors and retailers of consumer products. Each must notify the Commission immediately if it obtains information which reasonably supports the conclusion that a product distributed in commerce (1) fails to meet a consumer product safety standard or banning regulation, (2) contains a defect which could create a substantial product hazard to consumers, (3) creates an unreasonable risk of serious injury or death, or (4) fails to comply with a voluntary standard upon which the Commission has relied under the CPSA.” (Recall Handbook, 1999).

“The Commission considers a company to have obtained knowledge of product safety related information when that information is received by an employee or official of the firm who may reasonably be expected to be capable of appreciating the significance of that information. Once that occurs, under ordinary circumstances, five working days is the maximum reasonable time for that information to reach the chief executive officer or the official assigned responsibility for complying with the reporting requirements. A company must report to the Commission within 24 hours of obtaining reportable information. A company should file its report with the Division of Recalls and Compliance. The report may be filed by mail, telephone (301-504-0608, ext. 15), or electronically through the CPSC web site (www.cpsc.gov) or fax (301-504-0359). The following information should be transmitted:

·           Description of the product.

·           Name and address of the company, and whether it is a manufacturer, distributor, importer or retailer.

·           Nature and extent of the possible product defect or unreasonable risk of serious injury or death.

·           Nature and extent of injury or possible injury associated with the product.

·           Name, address and telephone number of the person informing the Commission.

·           A timetable for providing information not immediately available.” (Recall Handbook, 1999).

Recall Notice:

“The objectives of a recall are: 1.To locate all defective products as quickly as possible; 2.To remove defective products from the distribution chain and from the possession of consumers; and 3. To communicate accurate and understandable information in a timely manner to the public about the product defect, the hazard, and the corrective action. Companies should design all informational material to motivate retailers and media to get the word out and consumers to act on the recall.”

“In determining what forms of notice to use, the paramount consideration should be the level of hazard that the recalled product presents. Class A hazards warrant the highest level of company and Commission attention. Other considerations include where and how the product was marketed, its user population, the estimated useful life of the product, and how the product is most likely to be maintained and repaired.”

“A company conducting a recall must take particular care to coordinate the notice portion of the recall so that all participating parties, including retailers, have sufficient advance notice so that they can carry out the actions agreed upon. Notice also needs to be balanced -- the purpose of some elements, such as news releases, press conferences, and video news releases -- is to get the media to publicize information about the recall widely. Other elements, such as advertisements and posters, assure that the information is available to the public throughout the course of the recall and attempts to reach consumers who did not hear the original announcement.” (Recall Handbook, 1999). Appendix-1 gives examples of recall notices issued by Deer & Co., Ingersoll-Rand, Honda, Wal-Mart and Nike.

 

National Highway Traffic Safety Administration (NHTSA):

The Highway Safety Act of 1970 established the National Highway Traffic Safety Administration (NHTSA).  This government funded administration aims is responsible for reducing injuries, economic losses, and deaths that result from motor vehicle accidents.  Safety standards are created and enforced for motor vehicles.  Grants from state and local governments fund this safety program.  NHTSA covers many areas in traffic safety.  They promote use of seatbelts and child safety seats, investigates odometer fraud, investigates safety defects in motor vehicles, sets fuel economy standards, establishes anti-theft regulations, and provides customer information on safety topics dealing with motor vehicles.  Included in the customer information is a list of recalls in each year, and even rollover ratings for different models of vehicles. (NHTSA Website, 2002)

 

Firestone Tires:

The NHTSA launched a defect investigation on Firestone tires on May 2, 2000.  The brand of tires tested was the ATX, ATXII, and Wilderness tires produced by Bridgestone/Firestone.  This investigation was due to tire separations with these tires, causing many injuries and even deaths across America.  Firestone had recalled 14.4 million of the defective tires, but 6.5 million over defective tires were not included with this.  NHTSA advised Firestone in August of 2000 that drastic measures should be taken about the potential risk of injuries involving the defective tires.  NHTSA urged Firestone to expand the recall further, and cover the remaining 6.5 million tires.  Firestone did not expand the recall, and many people died because of this. 

The NHTSA told customers at this time to replace tires if they had them.  NHTSA also gave information on what to do about the defective tires.  A list of every defective tire was listed on the NHTSA website, and even a consumer hotline.  They recommend steps to take for these defective tires:

• Check tires for visual problems
• Make sure tire are properly inflated
• Do not drive excessive speeds, especially in hot climate
• Do not overload your vehicle
• Wear seatbelt

Although NHTSA could not recall the tires, the investigation aided Firestone to act on the problem. (Firestone Website, 2002)

 

Conclusions:

“Consumers no longer view product recalls in a negative light. Millions of products have been recalled over the years. Today, consumers believe they enjoy a safer, better product as a result of a recall conducted responsibly by company. Successful product recalls in the past have rewarded companies with continuing consumer support and demand for the firms' products. The role of a recall coordinator within a company becomes critical from this perspective. How well a company conducts a timely, reasonable recall of a product can have a strong influence on consumers' attitude about the firm.” (Recall Handbook, 1999)

 

Recommendations:

“The recall coordinator should fully review the company's product line to determine how each product will perform and fail under conditions of proper use and reasonably foreseeable misuse or abuse. Through research and analysis, product safety engineers can identify the safety features that could be incorporated into products that present safety risks to reduce their potential for future injury.”

“The company should institute a product identification system if one is not now in use. Maintaining accurate records about the design, production, distribution, and marketing of each product for the duration of its expected life is essential for a company to conduct an effective, economical product recall. Records of complaints, warranty returns, insurance claims, and lawsuits often highlight or provide early notice of safety problems that may become widespread in the future.”

“Accurate data should be kept on all production runs -- the lot numbers and product codes associated with each run, the volume of units manufactured, component parts or substitutes use, and other pertinent information which will help the company identify defective products or components quickly. Data should be maintained as to the location of each product-by-product line, production run, quantity shipped or sold, dates of delivery, and destinations.”

“Documenting the results of quality control testing and evaluation associated with each production run often helps companies identify possible flaws in the design or production of the product. It also aids the firm in charting and sometimes limiting the scope of a corrective action plan. Product registration cards for purchasers of products to fill out and return are an effective tool to identify owners of recalled products. The easier it is for consumers to fill out and return these cards, the greater the likelihood the cards will be returned to the manufacturer. For example, some firms provide pre-addressed, postage-paid registration cards that already have product identification information like model number, style number and special features, printed on the card.” (Recall Handbook, 1999).

References:

Consumer Product Safety Act, 1972, http://www.cpsc.gov/businfo/cpsa.pdf

CPSC Website, CPSC Does Not Have Jurisdiction Over All Products, 2002 http://www.cpsc.gov/businfo/notcpsc.html

Firestone Website, 2002, http://www.firestone.com

NTHSA Website, 2002, http://www.nthsa.dot.gov

Recall Handbook, A Guide for Manufacturers, Importers, Distributors and Retailers on Reporting Under Sections 15 and 37 of the Consumer Product Safety Act and Section 102 of the Child Safety Protection Act and Preparing for, Initiating and Implementing Product Safety Recalls, May 1999, http://www.cpsc.gov/businfo/8002.html

 

Appendix –1: Recall Notices

 

1.   CPSC, Deere & Co. Announce Recall of Lawn Tractors http://www.cpsc.gov/CPSCPUB/PREREL/prhtml02/02517.html

 

2.   CPSC, Ingersoll-Rand Co. Announce Recall of Portable Air Compressors Sold Between 1983 and 1991 http://www.cpsc.gov/CPSCPUB/PREREL/prhtml02/02108.html

 

3.   CPSC, Honda Announce Recall of Off-Road Motorcycles http://www.cpsc.gov/cpscpub/prerel/prhtml01/01038.html

 

4.   CPSC, Wal-Mart Announce Recall of Red Devil Gas Grills Sold at Wal-Mart http://www.cpsc.gov/CPSCPUB/PREREL/prhtml02/02206.html

 

5.   CPSC, NIKE USA Inc. Announce Recall of Jordan Trunner Cross-Training Shoes http://www.cpsc.gov/CPSCPUB/PREREL/prhtml01/01204.html