MFG 2.0

Chinese Tires To Get Kicked To The Curb?

Interesting news from last week. The WSJ is reporting that the U.S. International Trade Commission ruled that the sale of certain Chinese-made tires is disruptive to the U.S. market.

According to the story, "By a 4-2 vote, the panel sided with a U.S. labor union, finding that low-cost Chinese-made tires, used on cars, light trucks and sport-utility vehicles, are being imported at a rate that threatens U.S. tire makers."

Reminded me of a previous post that might be relevant to revisit. Back in 2007, I wrote a post entitled Tire Recall Looms, Chinese Product Problems Roll On about defect problems with Chinese tires, and the problems that might cause for businesses in that sector, as well as consumers:

The Chinese manufacturer, Hangzhou Zhongce Rubber Co., has so far failed to provide information that would allow FTS and the NHTSA to determine exactly how many tires in which batches were sold, and by whom.

Unsurprisingly, FTS has sued Hangzhou in U.S. District Court in Newark, charging that at some point in their business dealings Hangzhou started providing defective tires that didn't meet the specs of the original contract.

A Hangzhou company official reached by the Wall Street Journal said: "We are aware of this matter, and we are now in the process of responding to the lawsuit. Production and sales at our company remain normal."

Ouch.

It's important here to remember that the largest event of this kind we've seen in this country was the 14.7 million American-made Firestone tires recalled in 2000.

However, one big difference is that Firestone could be charged with, and could afford to fund, both the recall and the lawsuit settlements, whereas FTS will most likely go under -- and where does that leave consumers?

Has anything changed in the past two years? Could this be a sign of greater oversight of anticompetitive Chinese business practices by U.S. trade regulators? Or is the tire market situation just becoming more of a red flag because the recession has people looking for the cheapest deal possible (regardless of any obvious, and still fairly recent, reasons to be concerned about reliability/safety etc.)?

TAGS: Innovation
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