Product Safety, Recalls & Product Liability Prevention Seminar Day of Wood Randall Goodden Manufacturing Background Interim President Corporate VP - New Product Development, Quality & Product Reliability, Field Services, Technical Support, Litigation Management 30+yrs Author Available through Amazon.com & Bookstores Everywhere 1 1
Seminars Worldwide USA, UK, Europe, Malaysia, Australia, Thailand, India, China In-House Seminars Product Safety & Liability Prevention Consultation 2 2
IMPACT OF PRODUCT LIABILITY LAWSUITS On Manufacturers U.S. Product Liability Statistics U.S. Product Liability Statistics Over 80,000 product liability cases annually in the U.S. (2013 study by Harvard Law School) Statistics Jury awards hit new $billion highs, not seen in more that a decade Class action lawsuits have increased in the past 10 years by over 1000% The average median jury award in all product lines of product liability cases is over $1.9M Plaintiffs win 37-53% of product liability trials in front of juries (Contingency basis) Roughly 96% of cases settle out of court, but there are indications that this is dropping 3 3
Automotive Recall Trends NHTSA RECALLS 1000 900 800 700 600 Recalls 500 Uninfluenced 400 Influenced 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year 10 FDA Recalls 9361 9288 9469 9178 8065 8044 8061 5585 5778 5338 4670 4266 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 European Commission RAPEX Recalls 12 4 4
U.S. Consumer Product Recalls 600 563 472 467 500 465 402 393 400 359 346 309 282 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 13 CPSC Recalls by Fiscal Year 563 600 472 467 465 500 449 439 402 410 387 373 359 400 386 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 14 Why So Many Recalls? Why So Many Recalls? Typical Causes Defects in Design Not complying with Regulatory requirements Defective components/materials Defects in manufacture 5 5
Biggest Furniture Recall Biggest Furniture Recall in U.S. History in U.S. History IKEA Recalling up to 29 million chests and drawers in the wake of the third child death in three years, Ikea USA president Lars Petersson described the recall as "unprecedented" It marks the largest furniture safety recall in American history, according to the Consumer Product Safety Commission (CSPC). Mechanical Design Failures Mechanical Design Failures Fuji Recalls Over 10,000 Women’s Bikes The bicycle's frame can break in the center of the downtube during use, causing the rider to lose control and fall. Troy-Bilt Recalls 134,000 Electric Leaf Blowers The leaf blower's impeller can break and strike the operator during use, posing a serious laceration hazard. 17 reported incidents, 12 required stitches. 159,000 Black & Decker Coffee Pots Being recalled because their handles can break off and cause serious injury and/or burns. Graco Recalls 4.7 Million Strollers The folding hinge can cause the amputation of a child’s finger. Electrical System Failures Electrical System Failures GE and 12 Other Brand Dehumidifiers Gree manufacturing (China) - 2.5 million dehumidifiers are being recalled because they can overheat, smoke and catch fire. Over 75 fires have been reported. Kaz Portable Electric Heaters The heater’s internal housing, including the fan, heating element, and circuitry, can detach and start on fire. Genie Garage Door Openers Genie is recalling 18,000 electric garage door openers because the control board can overheat and start on fire GE Front-Load Washers A wire can break in the machine and make contact with a metal part on the washtub while the machine is operating, posing fire and shock hazard. 6 6
Regulatory Failures Regulatory Failures Womens Robes at Bloomingdales The bathrobes fail to meet the federal flammability standard. Scope Original Mouthwash The mouthwash contains ethyl alcohol and bottles have malfunctioning child-resistant closures. Triple Eight Bicycle Helmets Product testing shows that the helmets do not comply with CPSC safety standards for impact testing. JD Fine & Co Children’s Hooded Sweatshirts The sweatshirts have draw strings at the neck. The UL Global The UL Global ‘Product Mindset’ Study ‘Product Mindset’ Study UL conducted a study of 1521 manufacturers and 1528 consumers across a range of export/import markets, including China, Germany, Brazil , India and the U.S. and found the following: 90% of manufacturers are confident that they are ahead of the curve in delivering safety, reliability and sustainability. 70% of consumers feel manufacturers do not conduct thorough testing before launching new products. 84% of manufacturers believe that consumer confidence in product safety is increasing, but 58% of consumers believe that manufacturers value sales over product safety. Product safety and performance are the top two considerations for both consumers and manufacturers. Why Focus on PRODUCT LIABILITY PREVENTION? 7 7
Why Focus More On Product Liability Prevention? Companies with the best Quality programs aren’t doing enough. Quality systems are typically focused on preventing “Manufacturing Defects”. Executive Staffs truly know little about product liability prevention. Studies show 75% of Engineers have no real training in hazards & risk assessment. In most cases, no one is truly in charge of this area. Recalls and product liability lawsuits continue to grow in number Understanding the full realm of Product Liability Prevention Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT Recall Procedures LIABILITY Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instructions Supplier Control Document Control Records Retention 8 8
Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT LIABILITY Recall Procedures Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instructions Supplier Control Document Control Records Retention Contracts & Agreements Accident Investigation Design Reviews Product Safety Incident Reports Reviews PRODUCT Recall Procedures LIABILITY Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instructions Supplier Control Document Control Records Retention Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT Marketing / Recall Procedures LIABILITY Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instructions Supplier Control Document Control Records Retention 9 9
Defects in Marketing Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT Recall Procedures LIABILITY Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instruction Supplier Control Document Control Records Retention Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT Recall Procedures LIABILITY Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instructions Supplier Control Document Control Records Retention 10 10
Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT LIABILITY Recall Procedures Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Supplier Labels & Instructions Control Document Control Records Retention Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT Recall LIABILITY Marketing / Advertising Procedures PREVENTION Reliability Testing Manufacturing Quality Labels & Instructions Supplier Control Document Control Records Retention Contracts & Agreements Accident Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT Recall Procedures LIABILITY Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instruction Supplier Control Document Control Records Retention 11 11
Akio Toyoda Testifies in Front of Congress Feb 2010 Akio Toyoda Yoshimi Inaba President & CEO N.A. President & CEO 34 Akio Toyoda Testifies in Front of Congress Feb 2010 More interested in growth, then Quality & Safety Failed to “connect the dots” as incidents were surfacing in Europe and the U.S. Blamed the customer for the incidents Failed to recall or react to the problems when they learned about them In 2013 Akio Toyoda began to reorganize the company in the aftermath of its struggles over the past few years. He made Jim Lentz, President and CEO Toyota Motor Sales, USA 35 Accident Contracts & Agreements Investigation Design Reviews Incident Reports Product Safety Reviews PRODUCT Recall Procedures LIABILITY Marketing / Advertising PREVENTION Reliability Testing Manufacturing Quality Labels & Instructions Supplier Control Document Control Records Retention 12 12
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