Nine months after Foreign Tire Sales (FTS) Inc. began a recall of light truck radial tires manufactured by Hangzhou Zhongce Rubber Co. Ltd., only about 10,000 of the estimated 255,000 tires have been recovered.
Although the recall, which began Aug. 9, 2007, ended officially on Oct. 25, Union, N.J.-based FTS still has recall information on its Web site for both tire dealers and consumers who want to return their tires.
About 7,000 tires were retrieved during the official recall period. FTS continues to accept tires and will continue to do so, FTS President Richard Kuskin told Tire Business, although more tires are coming from individuals than from dealers.
FTS recalled the Hangzhou tires after sending the National Highway Traffic Safety Administration (NHTSA) a defect report saying the tires-sold in the U.S. under the Westlake, Telluride, Compass and YKS brand names-lacked sufficient gum strips between the belts to prevent belt separation.
As the manufacturer of record under NHTSA recall regulations, FTS was responsible for conducting the recall. The company originally estimated the recall at 450,000 tires and said it could only pay 10 to 15 percent of the estimated $50 million to $80 million cost.
As the estimates were revised downward, however, FTS published quarter-page ads in USA Today and issued press releases, video releases and certified letters to publicize the recall.
As it looks at the recall in the rearview mirror, Mr. Kuskin said the distributor is "gradually building up our business to where it was three years ago."
The tire business is not easy for anyone these days, he said, but FTS has since forged a good relationship with another Chinese tire maker, Shandong Linglong Rubber Co. Ltd.
According to its company profile on the Internet, Shandong Linglong has been in business since 1975. It makes passenger, truck, bus and off-the-road (OTR) tires, and has sales of about $133 million annually.
The controversy over the Hangzhou-made tires began with a lawsuit filed in Philadelphia Circuit Court against Hangzhou, FTS, General Motors Corp. and other plaintiffs. That case stemmed from an August 2006 rollover crash allegedly caused by the belt and tread separation of a Hangzhou tire. Two men died in the accident, and a third suffered permanent brain damage.
Two subsequent suits were filed in New Jersey federal district court. In the first, FTS sued Hangzhou, seeking unspecified damages and a court injunction against further importation of Hangzhou tires.
In the second, Jeffrey Killino, the lead plaintiffs' attorney in the Philadelphia case, sought certification of a class-action lawsuit against Hangzhou, FTS and other importers.
Mr. Kuskin declined comment on the legal actions. Lauren Colton, an attorney in the Baltimore office of Hogan & Hartson, Hangzhou's U.S. legal representative, said the Philadelphia case was still pending, but Mr. Killino voluntarily withdrew the class action Jan. 31. The court approved the withdrawal Feb. 6, she said.
Ms. Colton had no details as to the reasons for the withdrawal, and Mr. Killino did not return phone calls to his office. Hangzhou consistently has stated that its tires were completely safe and should never have been recalled.
At least partly in response to the FTS recall, NHTSA signed a memorandum of understanding (MOU) Sept. 12 with China's National Development and Reform Commission.
According to publicity issued at the time, the MOU was designed to strengthen cooperation and communication between the U.S. and China to develop and improve motor vehicle regulations and safety.
The cooperation would include exchanges of information in such areas as development of technical regulations and standards, dissemination of consumer information, enforcement of safety standards and new car assessment.
Since the MOU was concluded, a NHTSA spokesman said, China and the U.S. have reached agreement on global technical regulations covering vehicle headrests, safety glazing of vehicle glass and electronic stability control.
"The MOU certainly helped streamline our relations with China," the spokesman said. It also facilitated plans for the agency to send a high-level delegation to Beijing and Shanghai this coming June to visit Chinese auto manufacturing plants and discuss vehicle safety certifications, he said.
In June of last year, Connecticut Attorney General Richard Blumenthal also instigated a multi-state investigation into the distribution and sale of the recalled tires. There was no word from the Connecticut attorney general's office at presstime as to the disposition of this investigation.
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Anatomy of a recall
U.S. importer Foreign Tire Sales (FTS) Inc. said some 250,000 recalled tires-not the original estimate of 450,000-were made by Hangzhou Zhongce Rubber Co. Ltd. in Hangzhou, China, and sold between mid-2002 and mid-2006.
The tires were sold under the Compass, Telluride, Westlake and YKS brand names in sizes LT235/75R15, LT225/75R16, LT235/85R16, LT245/75R16, LT265/75R16 and LT31x10.5-15.
Owners of those tire brands were told to check the sidewalls for the U.S. Department of Transportation (DOT) numbers and the letters "FTS" to determine if they were part of the recall.
Affected tires had sizes beginning with "LT" and DOT numbers beginning with "7D" and ending in "02," "03," "04," or "05."
Tires with DOT numbers ending in "06" were not part of the recall, nor were YKS tires with DOT numbers containing the letters "8E" or Compass Trailer Service tires bearing the letters "ST."
No specialty tires or bias-ply tires were part of the recall.
FTS initially said it could pay only 10 to 15 percent of the original $50 million to $80 million cost of the tire recall, but the company eventually revised its cost estimate for the recall to less than $20 million.
As the estimates were revised downward, FTS published quarter-page ads in USA Today and issued press releases, video releases and certified letters to publicize the recall.