Fixing 'Unintended Consequences'

June 16, 2010
Proposed legislation to modify 2008's sweeping consumer product safety law is drawing mixed reactions from manufacturers.

Sean Hilbert is among the manufacturers keeping a close eye on proposed draft legislation aimed at modifying the Consumer Product Safety Improvement Act of 2008 (CPSIA). So far, the president of Cobra Moto is not entirely pleased with what he sees.

"It's moving in the right direction. It's not moving fast enough," he says.

The draft legislation in question is the Consumer Product Safety Enhancement Act of 2010 (CPSEA), introduced by Rep. Henry Waxman (D-Calif.) in March and debated in late April at a hearing before the House Subcommittee on Commerce, Trade and Consumer Protection. It aims to address what some have called the "unintended consequences" of the CPSIA, a sweeping law that reformed U.S. consumer safety laws in the wake of a seeming groundswell of recalls of children's products, many due to unsafe lead levels.

Among the unintended consequences, the law's critics say (and proponents as well), is the wide range of children's products swept up by the lead provisions -- even for products not likely to be ingested or mouthed by children, as well as burdensome and expensive testing procedures that could drive smaller manufacturers out of business (and already have, in some instances). The complexity of implementing the legislation is evidenced by several stays of enforcement of lead-content limits for certain products as well as third-party testing requirements.

The draft proposal's efforts to remedy those consequences include:

  • Providing the Consumer Product Safety Commission with more regulatory flexibility to grant exceptions to the lead limits of the CPSIA;
  • Giving relief to thrift stores and other retailers by offering an exclusion for some used clothing and modifying the lead limit set to go in effect August 2011 to apply only to newly manufactured products;
  • Providing relief to small batch manufacturers by approving alternative testing requirements and removing the applicability of phthalate limits to inaccessible component parts.
    Cobra Moto is among small manufacturers looking for relief from the lead-limit and testing provisions of the Consumer Product Safety Improvement Act of 2008. Some manufacturers already have been driven out of business by the law's strict requirements.

    The draft proposal has drawn mixed reactions, even from CPSC, which presented its comments during the April 29 hearing. Others that presented testimony include the Motorcycle Industry Council, the National Association of Manufacturers (NAM) and the Handmade Toys Alliance (HTA).

    In its written comments, CPSC acknowledged the lead exclusions and exemptions process in the CPSIA is "not workable." Because of the strict language of the law, no product has met the exceptions requirement "in spite of the fact that the staff has told us with each petition that the products in question do not present a risk of harmful exposure to lead," the comments note. That said, the draft bill has "serious problems" that should be addressed before the enactment of final legislation. Those concerns relate to lead exception language, which the CPSC contends both is unclear and would favor large companies.

    NAM and the Handmade Toy Alliance both endorsed the CPSEA, but with reservations. NAM's Rosario Palmieri, vice president for infrastructure, legal and regulatory policy, said the manufacturing trade association supports the legislation with changes to the lead-limit exclusion language, among other changes. "The NAM and its members appreciate the agreement of the chairman and staff to further define critical words in the legislation such as 'practicable' and 'measurable adverse impact' in the committee report language," according to Palmieri's testimony.

    "The CPSEA as currently written will likely save some of our member businesses. With improvements, however, you can save almost all of them," stated the Handmade Toy Alliance in a follow-up letter to the hearing. The HTA has called for an exemption from third-party testing for small batch manufacturers in the CPSEA and would like alternative testing methods be made available to companies of all sizes.

    Cobra Moto's Hilbert remains skeptical about any benefit the draft proposal would provide for small manufacturers as currently written. His company, based in Hillsdale, Mich., employs 30 workers and has about $5 million in sales. It makes premium race-ready mini motocross bikes for youth riders "that are serious about competing," according to the company's website. The industry in which Cobra participates -- youth motorized recreational vehicles (which also includes youth ATVs) -- is among the industries that requested and was denied an exclusion to the allowable lead levels in its products. However, it was granted a stay of enforcement, which is set to expire May 1, 2011.

    NAM's Rosario Palmieri

    Like others, Hilbert is concerned with the language in the draft proposal as it relates to the exemption process for lead levels. He's particularly concerned about the third component of the exclusion test, which says in the draft: "an exception for the product, component part, or material will have no measurable adverse effect on public health or safety, taking into account normal and foreseeable use and abuse." Such language, Hilbert says, could be interpreted to ban motorcycles, even absent the lead issue. "You can potentially be injured on a motorcycle, bicycle, anything," he says. (Cobra Moto has never had a product liability suit brought against it, Hilbert says. Beyond all the traditional measures to assure the safety of the company's products, the Cobra Moto's president says the company has been very aggressive in developing a tight network of communication with its customers to assure that problems are addressed quickly.

    Plus, he notes, the race mindset of his clientele "is pretty hardcore.

    For the most part, they understand responsibility for their own actions and they take it.")

    Hilbert also notes that the draft legislation provides no help for manufacturers of his firm's size when it comes to meeting the third-party testing requirements. He estimates his compliance costs would reach several million dollars per year, not including the administrative costs.

    Proposed legislation to amend the CPSIA has a ways to go before passage, if it occurs. However, NAM's Palmieri said he expects a version of the CPSEA to pass the House and Senate this year, likely not as a stand-alone measure but tacked on to other legislation.

    Without a fix to the CPSIA, Hilbert says his company will face a tough decision when the stay of enforcement for youth motorized vehicles expires next May. "We shut our doors because there is no way we can comply, or I go to jail."

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    About the Author

    Jill Jusko

    Bio: Jill Jusko is executive editor for IndustryWeek. She has been writing about manufacturing operations leadership for more than 20 years. Her coverage spotlights companies that are in pursuit of world-class results in quality, productivity, cost and other benchmarks by implementing the latest continuous improvement and lean/Six-Sigma strategies. Jill also coordinates IndustryWeek’s Best Plants Awards Program, which annually salutes the leading manufacturing facilities in North America.

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