If you think the Toyota car recall is something special, think again.

Recalls happen all the time. A recall of any product can take place when someone registers an official complaint that the product is a danger to use, which could result in serious injuries or death to other consumers. That is when the US Consumer Product Safety Commission comes in to investigate, to protect public users from such risks.

If a real risk is found, a recall can be required. A recall of products can include food and health goods, toys, automobiles, washing and refrigerator appliances, as well as HVAC units. Companies can also institute recalls on their own, without government involvement, if they realize a product is defective.

Here is an example of what can happen. Suppose a small business manufacturer, which we will call the Maine Widget Company, makes electronic sensor devices. Their components parts have been sold to several industries, which have gotten a batch of sensor products from Maine Widget which seemed to be defective, and did not function properly. As a result, customers using those defective sensors in their products had their finished products recalled.

It can be really costly to recall a product, and have it returned to its factory. It is even more expensive when field repairs are required. Sometimes the products are destroyed and a completely new product is replaced to the consumer at no cost.

In addition to these costs, recalls can damage a brand’s reputation and customer loyalty. Add in returned transportation costs and potential liabilities from injuries or death and you have a real survival problem in the business. In many instances, recall involves stiff fines and possibly jail sentences, plus legal litigation costs to companies.

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Government regulations enforce compliance and reporting issues that companies have to adhere to. Recalls on the Toyota Motor Company problems were recently mentioned in newspaper headlines, but over the past years, other car company giants like Ford, GM, Chrysler and others also had recalls due to defective materials, hardware or electronic components that could cause injuries or death to consumer users. The remarkable situation was once these car products risks were fixed and the media attention subsided, sales by these companies rebounded. Let’s hope it happens with Toyota, too!

Publicity and public relations on recall campaigns usually lead to high monetary costs and losses on each product’s brand image. In addition, class action suits filed by lawyers, frequently add to the costs.

You don’t have to go far to remember recalls on over a million baby cribs, due to poor construction design, that caused infant deaths. Recalls are made on foods that had the possibility of salmonella poisoning. There have even been recalls on things like ladders, for not having proper rubber floor caps to eliminate falling injuries. Public safety and protection are crucial.

Recall solutions are complex and need supervision, in both technical and practical ways. Customers expect a supplier to manage a potential crisis on safety and to repair the product under recall. Brainstorming by a company’s management team should focus on how the product design needs to be corrected. Recalls also require damage control by the supplier, which includes good public relations to let people know what will be done, when it will be started and how it will be concluded.

An immediate response is needed to correct any recall problem, in order to eliminate substantial future liabilities. Consumers want to make sure the crisis on a recalled product does not happen again. It must be effectively handled, fast and diligently documented by the source of supply.

Prevention is always better than a cure that triggers a recall. It is helpful to develop business processes in advance, for emergency problems that may confront a company and its products. By training the management team to handle complications that occur in design, product and testing failures, recalls can be avoided.

If you become aware of a serious product risk, you can contact your dealer to see if the dealer or the factory will service or replace the product on a safety recall. If you think the defect affects more than just your own purchase, you should contact the government’s official Web site on public health and food alerts, at www.recalls.gov. You also can find out if products you use are okay, by checking those sites, for lists of recalled products.

Recalls of products are serious business. We need harmful safety situations corrected to protect all consumers.

— Bernard Featherman is a business columnist and past president of the Biddeford-Saco Chamber of Commerce. He can be reached by e-mail at bernard@featherman.com.



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