By 1999, there had been two recalls and one Product Service Bulletin to replace G159 tires on RVs, but the recalls blamed inadequate load margin and customer misuse, and did not identify the tire design itself as defective. In fact, Goodyear has consistently assured the public that the tires are safe for all uses.

That claim was officially refuted on Friday afternoon in a Pasco County, Florida Circuit Court, when the jury in Schalmo v. Goodyear handed the tiremaker 5.6 million reasons to stop insisting that a G159 was okay to install on an RV.  The jury found that the Goodyear Tire & Rubber Company had sold a defective tire marketed to recreational motor home manufacturers, even though the tire was not suitable for RV use.

Christopher Roberts and Hugh Smith of Smith, Fuller and Roberts, P.A., a Tampa Bay firm specializing in tire litigation, represented the plaintiffs. The $5.6 million award represents one of the largest verdicts in Pasco County.

A failed Goodyear G159 was the cause of an August 11, 2004 crash that seriously injured the driver and two occupants. The tire was original equipment on a 2000 American Tradition motor home owned by John Schalmo of Port Richey, Florida. Schalmo was heading westbound on State Road 8 in Chipley, when the right-front tire of his motor home suffered a catastrophic tread separation. Schalmo lost control of the RV and veered off the right side of the roadway, heading out of control across an exit ramp and into a line of trees. Schalmo, and his wife’s parents William and Ruth McClintock, were seriously injured.  William McClintock lost both legs as a result of the crash; he died of unrelated causes two years before the trial.

This was the first G159 tire case to be resolved in a public trial. Goodyear has quietly settled as many as a dozen G159 tread separation cases involving serious injuries and deaths, in exchange for confidentiality. The Schalmo and McClintock families refused to agree to a confidential settlement, and have expressed their hope that Goodyear will recall the tire.

At trial, Roberts and Smith presented Goodyear documents including internal heat and speed testing and failure rate data that Roberts and Smith argued showed that Goodyear knew the G159 was improperly approved for 75 mph continuous highway use. Excessive heat in a tire will break down its internal components over time, and is a leading cause of tread belt detachment failures, as typified by the Schalmo crash

In a 2006 Fleet Owner magazine feature, a Goodyear marketing communications manager acknowledged that the G159 was a truck tire that had not been developed for RVs. That same year, Goodyear stopped selling the G159 and replaced it with a more robust tire specifically designed for motor home use.  But Goodyear has never recalled the all of the G159 tires already sold, and tens of thousands or perhaps more remain in the field.

Circuit Court Judge Stanley Mills has given Goodyear 45 days to present arguments for sealing the confidential Goodyear materials shown to the jury. Continued confidentiality is unlikely under the Florida Sunshine in Litigation Act, which prohibits a court from sealing corporate documents that would conceal a public hazard.

More on Goodyear G159: Goodyear Destroys Testimony Admitting RV Tire is Defective

And this would be somewhat true. In 2005 NHTSA did contract J.D. Walter and Alan Gent of the University of Akron to act as assembling editors for a low-budget update of the 1981 edition of the Mechanics of Pneumatic Tires. With a total project cost of $89,575, Walter and Gent recruited top-level executives in the tire industry – including the good folks at Cooper Tire—to serve as authors and members of the editorial board.  The work was to have been thoroughly vetted at the agency, but according to several sources, NHTSA passed a very light hand over the project and the final version consisted of a wholesale borrowing from the original, complete with decades old data, with some new chapters added to reflect technological advances.

The book was offered for sale in 2006 and although this was a NHTSA project, you couldn’t get it from the agency. A Google search of The Pneumatic Tire would direct customers, via numerous links to the version sold by the American Chemical Society’s Rubber Division, based at the University of Akron, where the public can download the book for 10 bucks. The government, through the National Technical Information Service, also sells a download – for $55. (This rather over-priced vendor is MIA in a casual search.)

But maybe the ACS Rubber Division’s version of The Pneumatic Tire was so much cheaper because it was missing a page. That would be the one after the title page that bears a disclaimer separating the views expressed in the book from those of the agency:

“This publication is distributed by the U.S. Department of Transportation, National Highway Traffic Safety Administration, in the interest of information exchange. The opinions, findings and conclusions expressed in this publication are those of the author(s) and not necessarily those of the Department of Transportation or the National Highway Traffic Safety Administration. The United States Government assumes no liability for its content or use thereof if trade or manufacturer’s names or products are mentioned, it is because they are considered essential to the object of the publication and should not be construed as an endorsement. The United States Government does not endorse products or manufacturers.”

Safety Research & Strategies has questioned why any private group is charging to disseminate a taxpayer-funded report. And SRS has contacted NHTSA’s Chief Counsel  urging them to compel the ACS to put the disclaimer back in. (SRS Letter to NHTSA)

While NHTSA contemplates correcting this key omission, SRS, as a service to our loyal readers, is making the complete version available. So, hurry! While supplies last! The one; the only; the original: The Pneumatic Tire! To receive your e-free copy of DOT HS DOT HS 810 561, click here.

For ACS’ version of The Pneumatic Tire click here.

In the former case, the RMA helped craft a tire fuel efficiency testing and grading and a consumer education provision in the Energy Bill of 2007. Smith was underwhelmed by the RMA’s role in a measure he called unnecessary and unfounded on any science.

Then Smith shakes Sean Kane in the association’s face on tire age, but even Kane “pounding the industry about old tires going bad,” barely rouses it. Despite, “countless lawsuits…alleging that older tires – six years or more in chronological age – failed and maimed or killed people; despite “Kane-led” attacks, bad press, proposed state laws, the RMA has only managed to burp out one squishy statement questioning the science behind tire age. Retailers are left to control the damage over the store counter.

Well, Mr. Smith, SRS knows a challenge when we hear one.

Read Smith’s Editorial in Tire Review

“Tires deteriorate with age, even if they have never or seldom been used. As tires age they are more prone to sudden failure that can cause a vehicle to crash. This applies also to the spare tire and tires that are stored for future use. Heat caused by hot climates or frequent high loading conditions can accelerate the aging process. Most vehicle manufacturers recommend that tires be replaced after six years, regardless of the remaining tread depth.”

Dealers would be required to retain those sales records for three years. The penalty for violating the law is $250.

“The assembly vote is a significant step in bringing important information to consumers and tire dealers” Kane said. “The bill provides tire buyers with critical information based on tire and vehicle manufacturer’s recommendations.  Contrary to the protests by the Rubber Manufacturers Association, informing consumers does not burden retailers. It does compel them to play an appropriate role in educating the public about all aspects of tire safety.”

The measure now moves to the California state senate.

While it wasn’t as good as a rant as one from the Tire Industry Associations’ Roy Littlefield, the immediate response from the tiremakers trade group wasn’t far off (RMA Press Release). Dan Zielinski, RMA senior vice president of public affairs, panted about the bill’s proponents using “fear-mongering to allege that tires reaching a certain chronological age are dangerous.”

Then they trotted out the old war horses that have won them many a regulatory reprieve in the past – helping consumers “burdens” tire retailers and “the allegations that there is a correlation between tire performance and chronological tire age are unfounded and unsupported by data.”

To repeat ourselves: industry scientists have been studying age degradation in rubber since the 1930s.  German studies established the link between tire age and tire failure, leading automakers, as early as 1990, to add warnings to their owner’s manuals that indicated tires older than six years should only be used in an emergency and replaced as soon as possible.  In 2001, the British Rubber Manufacturers Association (a trade organization that consisted of all major tire companies) devised this recommended practice on tire aging: “BRMA members strongly recommend that unused tyres should not be put into service if they are over 6 years old and that all tyres should be replaced 10 years from the date of their manufacture.”

More recently, studies from Ford Motor Company examined the material science behind tire aging and evaluated thermo-oxidative aging and its effects on radial tires.  This work led to the development of tire age test methods, published in peer-reviewed scientific journals, and the company’s recommendation that tires older than 6-years presented a greater risk for failure and shouldn’t be used.  NHTSA also tested and analyzed field-aged and artificially aged tires, as did the American Society of Testing and Materials (ASTM) working group and their findings validate Ford’s testing.

Of course, no consumer victory would be complete without an appearance by industry’s favorite boogeyman. Take it away Dan:

“AB 496 would only benefit trial lawyers by creating a new roadmap to sue California tire dealers,” Zielinski said.

Actually it would seem that disclosure would reduce tire dealers potential liability in a tire age case if they follow the law.

But, the RMA got two things right. The version that went to the assembly floor exempted auto dealers from the tire age disclosure requirements – a regrettable omission. As Zielinski points out “Any consumer who buys tires or a vehicle in a private transaction, or who buys a new or used vehicle from a dealer or who buys replacement tires from an auto dealer would not receive a notification under this proposal.” But legislation is a series of compromises and getting tire dealers who are selling the lion’s share of tires in California to provide information to consumers will have a significant effect in addressing this problem.

The second thing?

“Providing a simple, understandable notification to consumers about a tire’s date of manufacture is reasonable,” Zielinski said.

We couldn’t have said it better.

“I like Sean Kane. Over the phone he comes across as a likeable guy with an admirable agenda: He wants to improve the tire purchasing experience for consumers.”

The editorial notes Kane’s successes in attracting media attention to the issue and the policy initiatives that have ensued – the California tire age bill that cleared a hurdle last month and NHTSA’s slow turn toward acknowledging the importance of tire age. What’s wrong with this picture? Ulrich says that these actions are not based on sound science, rather, on a small five-year database that Safety Research & Strategies has created correlating tire age and tire failure. The Rubber Manufacturer’s Association stands alone in repudiating this connection.  Increasingly, they sound like tobacco-company executives insisting there’s no evidence that cigarette smoking causes cancer, while the rest of the world is satisfied that the facts prove otherwise and moves on. Ulrich repeats these denials in laying out his case against emotion-based tire regulations.

Here is Sean’s reply:

I am flattered that Bob Ulrich believes that my influence is so deep and widespread that I have singlehandedly aligned the media, state governments and a federal agency against the industry on the issue of tire age. But the consensus that has formed outside of the RMA and the TIA has more to do with the preponderance of scientific evidence than the force of my charisma.

Ulrich’s editorial glosses over ample data dating back to the 1930s on the material properties and thermo-oxidative aging of rubber. And the link between tire age and tire failure was not forged in my company’s database, it was known by the tire makers for decades from published scientific studies that date back more than 20 years.  It was these studies that led automakers, as early as 1990, to add warnings to their owner’s manuals that indicated tires older than six years should only be used in an emergency and replaced as soon as possible.  And in 2001, the British Rubber Manufacturers Association devised this recommended practice on tire aging: “BRMA members strongly recommend that unused tyres should not be put into service if they are over 6 years old and that all tyres should be replaced 10 years from the date of their manufacture.”

After the Firestone tire/Ford Explorer debacle in 2000, Ford Motor Company examined the material science behind tire aging and conducted a methodical evaluation of thermo-oxidative aging and its effects on radial tires.  This work led to the development of tire age test methods, published in peer-reviewed scientific journals, and the company’s recommendation to consumers that tires older than 6-years presented a greater risk for failure and shouldn’t be used.  NHTSA also tested and analyzed field-aged and artificially aged tires, as did the American Society of Testing and Materials (ASTM) working group.  While they have yet to issue any consumer level recommendations, their findings essentially mirror those found by Ford researchers.

It’s puzzling that the RMA and TIA remain dedicated outliers on tire age, while many of their members know otherwise.  The industry’s continuing denial that their products have a shelf-life appears to be rooted more in maintaining antiquated inventory and distribution systems than in defending science – or serving their customers, for that matter.

I wish I could say it was all me, guys. But it’s really all about the facts.

Sean Kane

The public tire maintenance campaign is a small part of a tire fuel efficiency program, included as an amendment in the Energy Bill of 2007. The inclusion of these requirements in the bill was hailed in many industry quarters as a “triumph” for the Rubber Manufacturers Association, which lobbied hard for them. The amendment requires NHTSA to establish through the rulemaking process a tire fuel efficiency rating system and test specifications to assess tire fuel efficiency. Besides the tire maintenance consumer education campaign, the public outreach effort includes a requirement to provide tire fuel efficiency information to consumers, via the internet and retail locations.

NHTSA has not yet published a notice of proposed rulemaking but it is expected to be issued soon, says Karen Aldana, a NHSTA spokeswoman

“Once the notice comes out, everyone will have a chance to comment on it and raise their concerns,” she said.

That hasn’t stopped influential voices in the tire retail industry from hyperventilating over an apocalyptic future in which consumers do not receive Tire Industry Association-sanctioned information on tire safety. Roy Littlefield, the TIA’s executive vice president, kicked off the panic with a lengthy screed in Modern Tire Dealer, published in late March.

“Let me ask you a question: Would you want your customers being educated about tires by trial lawyers? How about by so-called “safety experts” (I use the quotes here because we all know they are really not as concerned with true safety as they are with feathering their own nests, or the nests of their “birds of a feather,” the trial lawyers)? Would public watchdog groups be more to your liking? Or, how about environmental extremists? Better yet, how about if the government did it?”

“I don’t think I’m going out on a limb here by assuming that the answers to these questions would be a resounding “No!” But, that’s essentially what could happen if we don’t come together as an industry and unite NOW.”

Littlefield then issued a call to arms for tire retailers to seize control of the public education program to maintain the status quo.

Tire Review followed up with a less hysterical Viewpoints piece by Jim Smith, who conceded Littlefield’s main point that Very Bad Things Will Happen if consumers advocates get their filthy mitts on the tire maintenance education program. He also advocated for the government to contract the program to the TIA, because, “It has the neutrality and the industry representation to do a fair job, and it has a basic plan already in place called TIRES – the tire check-off program it first offered some five years ago. With government money (because the program is legislatively mandated) and the right hires (TIA will need to staff up), TIA could do an admirable and certainly industry-

friendly job.”

Singled for special derision was Safety Research & Strategies president and founder Sean Kane. Littlefield veiled his reference to Kane as one of the “so-called tire experts.” Smith was more direct, dubbing him Sean “Old Tires Are Death” Kane.

Kane says that he approached Littlefield in 2003 when he first started researching the aged tire issue.  Kane’s concern was the tire dealers were not getting appropriate guidance from manufacturers and were likely to end up unknowingly causing harm to consumers.  Littlefield and the TIA weren’t interested, Kane said.

Instead, tire retailers have occupied themselves with building a bulwark against the slowly spreading consensus that tire age matters. Despite wave after wave of tire age recommendations from a few individual tiremakers and many major vehicle manufacturers, collectively, tiremakers opposed and continue to oppose efforts to develop a tire aging recommendation. They successfully fought off a 2003 proposed NHTSA regulation to address aging effects.  They have countered vehicle manufacturers tire age warnings with statements averring that there is no scientific support for a 6-year expiration date on tires. In 2006, the Rubber Manufacturers Association submitted to NHTSA the results of a scrap tire survey claiming chronological age doesn’t determine tire service life.

And now Littlefield is pushing for the TIA to lobby for states to enact tire inspection laws that the trade group would write and testify for.

In the meantime, one has to give the tire dealers their props – they have not only ferreted out the vast left-wing conspiracy to educate consumers about tire aging they have published their own strategy to take control of a government program and make it “industry friendly.”

Bill AB 496 was submitted by Assemblyman Mike Davis and sponsored by Sean Kane, president of Safety Research & Strategies, Inc, with support from American Center for Van and Tire Safety, American Federation of State, County, and Municipal Employees (ASFCME), Consumer Attorneys of California and Consumers for Auto Reliability and Safety.

The bill requires tire dealers to disclose the age of a tire to consumers in writing before the sale or installation of a tire.  Along with the tire age, dealers must provide the following statement about the increased hazards of aged tires:

“Tires deteriorate with age, even if they have never or seldom been used. As tires age they are more prone to sudden failure that can cause a vehicle to crash. This applies also to the spare tire and tires that are stored for future use. Heat caused by hot climates or frequent high loading conditions can accelerate the aging process. Most vehicle manufacturers recommend that tires be replaced after six years, regardless of the remaining tread depth.”

Dealers would be required to retain those sales records for three years. The penalty for violating the law is $250.

“This is the first step towards minimizing opportunities for vehicle crashes as a result of aged tires in the state of California.  This public policy will neither burden businesses nor deny consumers the opportunity to have important information that can save their lives” said Assemblyman Davis.

Davis was moved to submit the bill after a staff member saw in a story about tire aging on ABC News’ 20/20.  The report, based on SRS’ advocacy, featured that story of William Moreno, a 12-year-old from Los Angeles, who died in a rollover crash when a 12-year spare tire recently installed by a tire dealer suffered a tread separation.  The 2008 investigative report, which became one of the most widely viewed ABC News stories in 2008, also showed that tire dealers were selling “new” tires that were actually 6-10 years old.

“Right now the tire manufacturers, the vehicle manufacturers, and NHTSA are aware of the hazards associated with aged tires.  But tire dealers and the public have largely been out of the loop.  The lack of a systematic approach to educating and warning dealers continues to result in the aged tires being put into service and causing catastrophic crashes” says Sean Kane.

The issue of tire age degradation was first addressed in the U.S. in response to the Ford-Firestone tire debacle. Experts concluded that age degradation played a role in the catastrophic failure of these tires and a growing number of tire manufacturers and automakers issued tire age replacement guidelines for the U.S. market. In the last ten years, vehicle and tire manufacturers have warned consumers against using tires beyond six, or in some cases, 10 years.

While the National Highway Traffic Safety Administration has conducted research showing that tires degrade with age, it has yet to translate that research into a policy. In the meantime, four states -New York, New Jersey, California and Hawaii have jumped into the breach. State lawmakers are in the process of considering a variety of consumer remedies. The California legislation focuses on consumer disclosure, as does a pending regulation in New Jersey, where the state’s Division of Consumer Affairs is accepting public comment on a regulation mandating disclosure of tire age. A measure in Hawaii would prohibit the sale of tires older than six years. The New York assembly is mulling a law that would force manufacturers to mold the date of manufacture on both sides of the sidewall in a non-coded fashion.

OXFORD, NC-One year after a fatal crash and seven months after the National Highway Traffic Safety Administration launched a defect investigation into 30 million Chinese-manufactured tire valve stems that could crack prematurely, Dill Air Control Products has finally announced a recall.

In early December, the North Carolina-based distributor agreed to recall 1.8 million tire valve stems, acknowledging that three models of valve stems, the TR 413, 414 and 418, were manufactured without an additive to protect the rubber from deteriorating under exposure to ozone. The recall covers a fraction of the population that could be affected by the defect. An estimated 30 million tire valve stems were manufactured during the period in question.

The announcement closes a NHTSA Engineering Analysis into the defective valve stems.

Dill claims that the defect affects fewer than 200,000 valve stems confined to two lots manufactured by Topseal, a division of the Chinese conglomerate, Shanghai Baolong Industries Co. Ltd, in July 2006. (Topseal and Dill share corporate ownership. In March 2005, Shanghai Baolong and Zhongding Group purchased an ownership stake in Eaton Corporation’s Roxboro, North Carolina plant. The Chinese manufacturer renamed the company Dill Air Control Products and relocated the facility to Oxford.)

But Dill said it would recall all the valve stems manufactured in 2006, because it is impossible to identify the suspect lots. This campaign follows a customer satisfaction program, a recall of the defective tire stems from another distributor, two separate defect investigations – all emanating from a wrongful death lawsuit. On November 11, Robert Monk of Orlando, Fla. died when the right rear wheel of his 1998 Ford Explorer failed, triggering a rollover crash. The tire failure was linked to a cracked Dill TR413 valve stem and in March, the Monk family filed suit against Dill. The following month, Dill officials met with NHTSA to discuss the potential snap-in tire valve defect. Dill described a problem with valves leaking from cracks due to apparent ozone exposure and indicated that an early investigation had traced the concern to a five-month manufacturing period in 2006 – even though discussions about the integrity of the tire valve stem had taken place within the company two years earlier.

Three days after its meeting with NHTSA, Dill sent a Technical Bulletin to some major tire retailers advising them that the company had received complaints of surface cracks appearing on the outside of the rubber near the rim hole in several models. Despite this acknowledgement to dealers, the company didn’t initiate a recall to alert consumers.

In May, NHTSA’s Office of Defect Investigations opened a preliminary evaluation into the safety of the TR413 and Dill announced a customer satisfaction program. In June, another distributor of Topseal valve stems, Tech International of Johnstown, Ohio filed a separate defect report recalling six million valve stems, after customers reported problems with premature cracking. Tech International also claimed that the defect was actually confined to only 8,600 TRI 413 valve stems, manufactured between July and November 2006, but, like Dill, offered free replacements for any of the 6 million sold — and compensation for any tire damage caused by the defective part — because it was impossible to identify the defective lots or the end users.

“NHTSA was not even notified until the Monk family filed suit against Dill. Sadly, it took this fatal crash, a great deal of publicity, and a federal investigation before the company decided to recall” said Rich Newsome, the Orlando, Florida attorney representing the Monks.

In its Safety Defect and Non-Compliance Report, Dill said that it and Topseal engaged independent rubber engineering experts to perform mass spectrometry analysis on samples from lots produced from June to November 2006. According to Dill, the analysis revealed that two lots demonstrated “substantially different chemical properties than samples from other control periods.” Topseal admitted that, around that same time period, it had changed its distributor of the anti-ozone chemical agent used in the rubber compound. Dill concluded that the rubber used in the suspect lots was compounded using sub-standard anti-ozone chemicals.

Even before this NHTSA-inspired inquiry and the change in anti-ozone suppliers, Dill and Topseal were aware that its valve stems in 2006 had problems. In April 2006, the board of Dill Air Control Products Corporation met, with members from the U.S. and China attending. This was the first such meeting since Shanghai Baolong purchased the company. Amid the discussions about business strategy and future goals, the group discussed current challenges. At a technical exchange between Dill and Topseal, the managers discussed “problems such as tire valve leaking, core of tire valve not firm and so on,” according to a Shanghai Baolong report of the meeting.

While the recall signaled the closing of one probe into Dill-distributed valve stems, other Topseal valve stems remain under investigation. In late September, Safety Research & Strategies requested that NHTSA open a defect investigation into the Topseal tire valve stems used as OEM equipment in some Ford vehicles.

SRS was persuaded by its brief field survey that found prematurely cracked TR414 valve stems on 2007 Ford models, all bearing the Topseal symbol on the base of the stem and all demonstrating the failure modes identical to those in the Dill-labeled models. SRS also conducted an independent analysis of the agency’s complaint records and found that Ford was a standout among OE valve stem failure complaints, with 35 unique vehicle reports alleging valve stem failures on 2007 and 2008 Ford vehicles.

And on October 14, ODI opened a Preliminary Evaluation (PE08-060) into the valve stems, citing the possibility that they may crack due to poor ozone resistance. Although Ford claims that loss of tire air pressure doesn’t represent a safety hazard, the investigation is still pending.

Copyright © Safety Research & Strategies, Inc. 2008

Finding other complaints about this distribution company is easy enough for anyone with a passing familiarity with Google. You can read the dire warnings from consumers, or horror stories from former dealers who malign the products, the warranties and the company itself or about the fist fight that nearly erupted at the company’s exhibition booth at the Indianapolis scooter show in 2005, when a group of dealers showed up demanding access to repair parts. In July, the Consumer Product Safety Commission forced the importer to recall about 144 ATVs intended for 12-15-year olds, because the vehicles lacked front brakes, a manual fuel shut-off, padding to cover the sharp edges on the handlebar assembly, inappropriate tire pressure and an adequate flag pole bracket.

Holding the manufacturer accountable in a products liability case is a lot more difficult. The distributor may be located in the great state of Texas, but its products come directly from China. And, as an SRS investigation demonstrated, just identifying the actual manufacturer is a daunting task. Under the Consumer Product Safety Act, the term ‘manufacturer’ includes any person who imports a consumer product. Importers are directly responsible for the safety of goods they bring into the U.S. Yet, some attorneys say that it is critical to investigate the Chinese manufacturer, as well.

Jeffrey Killino of Woloshin & Killino of Philadephia has pursued several product liability lawsuits against Chinese-made products. In one of his most high-profile cases, Killino discovered that the Chinese manufacturer had a significant financial presence in the U.S.

“I recognize that the conventional wisdom is that because you have to deal with the jurisdictional challenges, you go after the importer,” Killino said. “And I’m not saying there aren’t valid reasons, in some cases, to exclude the Chinese manufacturer. But you have to link the product back to where it came from. You have to explore that.”

China is now the world’s second largest exporter of goods. In 2007, the U.S. imported $321.5 billion worth of Chinese goods. America has welcomed this tide of cheap Chinese products – they have buoyed the bottom line of the Wal-Marts and propped up the standard of living for their customers in an era of eroded incomes. But, the hidden costs of Chinese products are making news headlines with increasing regularity: defective tires and automotive components, tainted pet food, toothpaste, baby formula and pharmaceuticals, lead-coated toys and sofas that cause rashes. These sub-standard products have been linked to deaths and have raised public alarm.

Finding the line between a U.S. distributor and a Chinese manufacturer is neither short nor straight; it more closely resembles a web of interconnected companies obscuring the real owners. The Texas importer is a good example. It maintains offices in Texas and New Jersey as a distributor of recreational vehicles: motor scooters and motorcycles, go-carts and ATVs. SRS was able to identify the manufacturer of the go-cart involved in the fatal crash by locating the Frame Identification Number, a unique identifier which led to a company located in Yongkang, Zhejiang, China.

But this Chinese company is actually one of five holding companies which manufacture vehicles owned by a Chinese investment group. The holding company purchased a bankrupted U.S. gold-mining firm to be used as a shell corporation. The shell corporation, through a series of stock exchanges with a Hong Kong firm and another entity located in the Virgin Islands, became a subsidiary of a second holding company owned by the original Chinese investment group. That holding company listed the Texas importer as its largest U.S. distributor.

U.S. Customs records showed that the consignee for the Chinese go-carts was not the Texas distributor, but a second company, which shared the same U.S. address. This second Texas company also imported products from a third holding company owned by the Chinese investment group.

SRS’s investigation identified four other manufacturers of an identical go-cart, including one model that was recalled for defective seat belt buckles that unlatch in a crash. In what appears to be a concerted effort to prevent tracking and larger recalls, manufacturer names, makes and models of these products change with regularity, as do the various shell companies that are involved in their distribution.

In a second instance, SRS found that a valve stem linked to a 2007 fatal crash led back to a Chinese manufacturer, the Topseal division of Shanghai Baolong – the same company that made valve stems for another distributor who recalled them for premature cracking.

On November 11, Robert Monk of Orlando, Fla. died when the right rear tire of his 1998 Ford Explorer failed, triggering a rollover crash. The cracked Dill TR413 valve stem at issue was actually manufactured by Topseal, a subsidiary of Shanghai Baolong Industries Co., Ltd for Dill Air Control Products, LLC – an American company that was purchased by Chinese investors who have financial interests in the Chinese manufacturer.

In September, the National Highway Traffic Safety Administration upgraded its investigation to an Engineering Analysis into cracked tire valve stems. In its initial submission to NHTSA, Dill described its corporate and decision-making structure with Topseal as one that was intertwined, yet, at arms length:

Since its inception in March 2005, Dill has purchased tire valves branded under the DILL ACP brand name from Topseal. The location has remained the same. Dill is majority owned by Longwei Holding Company. Topseal (Shanghai) Auto-Parts Co., Ltd. is the supplier. This plant began making tire valves under the DILL ACP brand name in 2003. There is no direct equity relationship between Topseal and Dill. Some of the persons or entities who own equity in Dill also own equity in Topseal (Shanghai) Auto-Parts Co., Ltd. who is the supplier. This plant began making tire valves under the DILL ACP brand name in 2003. There is no direct equity relationship between Topseal and Dill. Some of the persons or entities who own equity in Dill also own equity in Topseal. The Board consists of two Dill managers and two other members representing equity ownership – one is an investor who has an equity stake in Dill, the other represents the holding company with an equity stake in Dill.

In Killino’s case, the relationship between the U.S. importer and the Chinese manufacturer was less circumlocutious.

On the August 12, 2006, Rafael B. Melo, Claudeir Jose Figueiredo and Carlos Souza, were passengers in a 2000 Chevrolet Express 2500 Cargo Van, bearing a Compass Telluride steel belted radial made in China in 2004. The van was traveling south on Pennsylvania Route 476, when the tire experienced a tread / belt separation causing the van’s driver to lose control. The vehicle rolled over and the three passengers were ejected. Melo and Figueiredo died in the crash. Souza suffered a permanent brain injury. The failed tire was imported to the U.S. by Foreign Tire Sales of Union, New Jersey. It was manufactured by the Hangzhou Zhongce Rubber Company, which FTS alleged, had left a critical component out of some 450,000 tires sold under the names Westlake, Telluride, Compass and YKS. Killino sued FTS and Hangzhou, touching off a recall in August 2007 that generated a lot of press. In the course of his investigation, he discovered that Hangzhou’s $10 million insurance policy was with a global company with assets in the U.S.

Killino says including the Chinese manufacturer in the lawsuit had other advantages: “The acts of the Chinese are so egregious that they allow you make a punitive case at trial. It will also drive the compensatory verdict and make liability stronger,” he says. “When the jury hears how bad the conduct of the manufacturer was, they become angrier at the importer who didn’t protect consumers.”

Finally, he says, drawing the Chinese into the lawsuit can create stronger pressure for a settlement, because the Chinese are very sensitive to criticism.

“They are extremely concerned about saving face,” he says.

Copyright @ Safety Research & Strategies, Inc., 2008