There has been a steady rise in product recalls in the past ten years. There were 467 product recalls in 2006, which is up from 128 in 2002 and as little as 38 in 1993. While there are several theories to explain this pattern of recalls, the most commonly-held theories include the outsourcing of jobs to foreign nations without lesser safety standards than the U.S., heightened public awareness and the technical failures of science.
Because these product recalls tend to fall within a wide array of industries, it’s likely there are a number of different factors behind the recall of products. So let’s look at each of these factors.
1. Foreign Imports – Throughout the 1990’s and 2000’s, American industries and the corporations that run those industries have shifted jobs overseas. The reason behind the desire to outsource jobs to countries with lower labor costs. Cutting costs allow companies to remain competitive in the retail market. Unfortunately, the countries these new plants are based in might not have as stringent health standards as the United States, or may not employ the personnel to inspect outgoing products the way the Americans buying those products might wish.
China is the starkest example. China increases the number of products it exports every year, but it has lax government oversight of the new industries that are forming. This has led to the rash of lead poison related incidents in toys and other children’s products. For instance, according to the US Consumer Product Safety Commission, 36& of product recalls in 2007 had to do with children toys. 47% of the product recalls in the same year were done so because of the presence of lead in the product. These two statistics have a heavy correlation, given that many Chinese toys were found to use lead-based paint. When children put the lead-painted toys in their mouths, they get lead poisoning – which can cause serious health risks, including fatalities.
You must remember that pet food and baby food from China also required product recalls. The pet food was found to either be rancid or to contain ingredients that were lethal to pets, and one estimation was that one to three thousand animals died in one year in one Chinese pet food incident. Then there was the case of the baby food that had chunks of food one-inch wide – easily large enough to choke a baby.
Of course, American corporations have had to recall products before, but it’s hard for an observer not to comment on the increased number of recalls coming from China and other foreign sources. Experts have lobbied for closer government regulation either on the American or Chinese side of the import/export trade. This would require either a U.S. government regulatory organization, or the amending of trade deals with China to force that nation to better police its industries, in order to bring them in line with American safety standards.
2. Heightened Public Awareness – Once a few product recalls of toy products and pet food are made and these recalls are covered in the media, the public has heightened awareness of the problems they might face buying imported (or domestic) products. This will cause parents and pet owners to check the products they have at the house, leading some to spot inconsistencies or dangers with the products they own. Therefore, one wave of product recalls sends a ripple effect through those industries, as one set of recalls brings another set of recalls.
This is what happened with the lead-paint fiasco. Children died from lead poisoning, leading to a recall of certain imported toy products. Concerned parents and public officials began checking similar products important from abroad, only to learn that lead-paint was a common material in a lot of toy manufacturing. Therefore, heightened public awareness on the part of American parents, American officials and (let’s be reasonable) Chinese industry heads caused another wave of product recalls.
Once the product recalls became an international story, there were a myriad of people searching for the next faulty products. This is a good thing, so I don’t want you to take the next sentence the wrong way. Besides concerned parents and product safety advocates, you had public officials and media outlets searching for dangerous products, because this was a good way to get noticed in the public – raising one’s poll numbers or tv ratings, whatever it might be. So the public recall story became a media firestorm, which continued to raise awareness.
3. Technical Failures – At the same time, there were technical and design failures in new science and technology that caused a number of recalls, completely apart from the imported child and pet products from foreign countries. This is what happened in the recall of laptop batteries.
Whether through design flaws or similar faulty inspection – or a combination of the two – the 2000’s also saw a number of highly public recalls in electronics and electric products. Tied for the second highest industry for recalls in that 2007 report was 13% for electronics/electric products, while the second-highest reason for recall was “risk of fire” at 19%. The laptop recalls, which had to do with laptop batteries that tended to catch on fire a propos of nothing, were a major part of this trend. Just like with the children’s toys, more reports of risky electronics came in, leading to more recalls.
In this case, sometimes technology designers and engineers are going to get it wrong. When the safety inspectors fail to catch these flaws, a product recall is in order.
A case with an older technology that also had significant failures was the tire industry. Ford and Firestone blamed one another for the huge tire product recall of 2006, after faulty tires were shown to have caused several driving deaths. Japanese tire makers later were involved in the tire recalls.
Product Recalls Everywhere
Also, corporations are probably more sensitive to product recalls now than they were 15-20 years ago. American corporations probably know the financial and public relations costs of public recall better in the days of the mass media than they had to a generation ago. One industry memo suggests that corporations look at five factors – legal, financial, ethical, technical, political – when deciding whether to issue a product recall or not. The same report suggested that companies move quickly and aggressively when a study of these five factors indicate they should recall a product. So companies are probably quicker to pull the trigger these days than before, especially if they or their manufacturers have recall insurance.
There’s a motivation for companies to be more proactive, because of an increasingly embattled public that is tired of dangerous products in their lives. Not only are lawsuits more likely to be filed, but if too many cases of dangerous products hit the public consciousness, a movement towards more government regulations is likely to pick up steam. The last thing most companies want is more government oversight in their business. The last eight years have seen the federal government pull back on a lot of their regulation of consumer products from where it was a decade before, though I’ll let you decide whether less regulation had to do with the increase in products recalls over the same time.
I hope your report goes well.