By now you've heard of the battle between NHTSA and New Jersey-based tire importer Foreign Tire Sales (FTS) over the recall of 450,000 Chinese-made car and light truck tires that lack critical 'gum strips' that help hold the tread onto the tire's casing. There are, of course, eerie similarities between this case and the infamous Firestone tire debacle of 2000, where tread separation on Firestone tires mounted on Ford Explorers led to Congressional hearings, executive firrings at Ford and Firestone, the disintegration of the nearly 100-year old partnership between Ford and Firestone, and countless millions in damages and recalled products. What the outcome of the Chinese tire situation will be is anyone's guess for now.
NHTSA is trying to get FTS to recall all of these defective Chinese tires, which the company at the moment won't do as it claims the cost of the recall -- between $60 million and $80 million -- would force it into bankruptcy. FTS is instead suing its Chinese supplier, Hangzhou Zhongce Rubber, to pay for the recall, which is setting up a whole new level of squabbling.
The two companies began jointly designing the tires in 2001, under the brand names Westlake, Telluride, Compass and YKS and market them as replacement radial tires for pickup trucks, sport-utility vehicles and vans. The Washington Post in particular did a good write up on these defective tires, so I won't go into all the nitty gritty details.
This is only the latest in a string of problems with Chinese goods, such toothpaste contaminated with antifreeze, pet food containing lethal amounts of fertilizer, shellfish rejected due to high levels of mercury, and children's toys covered in lead paint
I'm not knocking the Chinese, by the way -- these are just the facts. They are as hard working and as industrious a people that you'll find anywhere on this Earth. But I think what really needs to be examined closely here is how our demand in the U.S. for cheaper goods is leading to a rash of defective products reaching the market. And let's face it, the reason is that everyone's pocketbook -- from the family budget to the corporate bottom line -- is getting ferociously squeezed these days.
Fuel prices are spiking up over $3 a gallon, food prices are up, many of us have home mortages that are tripling due to adjustable rates, health care is out of sight, and the list just goes on and on. So no wonder all of us -- especially truckers -- are looking for lower cost options in our lives. That includes tires for our cars and commercial vehicles.
Back to tires: China is the top exporter of tires to the U.S., according to the Rubber Manufacturer's Association (RMA), shipping us just under 32 million tires last year. About 40% of all the tires bought new in the U.S. were imported in 2006 by the way, says the RMA, up from 21% just 10 years ago. That gives you an idea of just how attractive lower cost can be when budgetary belts start getting tightened.
Look, these kinds of issues are going to be with us for a very long time -- manufacturing and trade are now truly global, whether or not the President gets to keep fast-track authority to make trade deals. It's a reality of the modern world.
But that doesn't mean we should get taken completely by surprise here: a seriously cheap tire, like anything else, should be an invitation for much closer scrutiny. And this time it's a pure product issue. In the Firestone-Ford Explorer situation seven years ago, inflation levels were part of the issue, with tires being run at lower pressures than recommended to help keep the vehicle stable. Nothing like that seems to going on here with these tires, so far -- it's purely a physical defect that's causing them to fail. That's why it behooves us to keep an even closer eye on the products we buy from now on.