Phony parts cost Ford $1B

Phony parts cost Ford $1B http://www.detnews.com/apps/pbcs.dll/article?AID=/20070122/AUTO01/701220335/1148
WASHINGTON -- Counterfeit auto parts cost Ford Motor Co. a staggering $1
billion annually, which has spurred the Dearborn automaker to mount an aggressive campaign worldwide to attack the problem.
The auto parts industry estimates counterfeit parts have become a $12 billion problem worldwide, with $3 billion in phony auto parts sold in the United States alone.
Ford's disclosure of the extent of its counterfeiting problems -- part of a U.S. Chamber of Commerce study that will be released Wednesday -- is the first by an automaker to give a specific figure on losses due to counterfeit and pirated parts.
"That figure is probably light," Joe Wiegand, Ford's global brand protection manager, said in an interview Friday.
The chamber is officially releasing the 23-page study Wednesday and distributing it to more than 1 million businesses to help them crack down on counterfeit parts.
"Many businesses, particularly small and medium-sized companies, do not fully appreciate the bottom-line cost of lax supply chain security," according to the report. "The growing problem of counterfeiting and piracy threatens businesses and consumers in nearly every region of the world."
Counterfeiting costs companies like Ford in two ways: They lose money on sales of legitimate parts; additionally, the company may have to replace faulty counterfeit parts that make it onto their vehicles through warranty repairs.
The study also looked at counterfeiting problems for Xerox, Merck, New Balance and Bendix, an auto supplier.
Bendix Commercial Vehicle Systems LLC loses millions to Bendix look-alike parts, said Anthony LaPlaca, the company's vice president and general counsel. Those parts put "drivers at risk with low durability, poor fit and inferior workmanship," he said.
The Motor and Equipment Manufacturers Association contends Chinese companies are responsible for 80 percent of fake auto parts in the United States.
Evidence keeps growing
Ford's Wiegand said the automaker continues to find growing evidence of counterfeiting. Ford conducts raids around the world -- especially in China and India -- seizing fake parts and trying to penetrate secretive markets that distribute them.
Ford has also seized a lot of phony parts in the United States. They include parts destined for Ford-made taxis and police cars in New York City, he said.
But the problem affects local consumers, too. Most consumers don't know when a repair shop is using a phony part. But Wiegand warned that if a shop offers to fix a problem for $75 -- when it should cost $200 -- the deal's probably too good to be true.
In the Chamber of Commerce study, Ford said it has a network of informants helping the company counter the problem. Wiegand said he would like to see governments do more, and he noted that organized crime and terrorists use counterfeiting as a revenue source.
"The simple fact is that counterfeiting and piracy typically are perceived as inconsequential white-collar crimes. Everyone else has something more important," he said.
GM: Problem is significant
General Motors Corp. dedicates significant resources to the problem around the world, but hasn't put a dollar amount on it.
"The counterfeiters are criminals. They don't file financial reports with us," spokesman Tom Henderson said Friday. "It's kind of hard to get an accurate number on this. We know it's significant."
GM has seized more than $250 million in counterfeit auto parts in the past two decades, shutting down hundreds of counterfeiting operations.
The FBI and U.S. Customs officials have taken an interest in stopping the flow of counterfeit parts. In 2005, the FBI held a briefing for the auto parts industry on the counterfeiting issue and has opened investigations into the sale of counterfeit auto parts.
-- Never hire a Ferret to do a Weasel's job
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Jim Higgins wrote:

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070122/AUTO01/701220335/1148
So, what the hell is a Counterfeit part? Anything NOT made by the Auto manufacturer? Like Ford and GM make a lot of there parts anyway.
Sounds more like a plan to shut down the after market auto parts industry. Or restraint of trade.
Bob
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It's only when the parts as sold 'as if' they were genuine Ford parts. Most repair shops, reputable at least, will tell you about aftermarket parts, and even cut you a break. I had one accident, and the insurance company offered to cut my deductible if I took aftermarket. However, if I pay for genuine parts, I expect genuine parts. I saw the 'approved' estimate for my car after it got hit and it was all aftermarket. I balked and refused it, saying I wanted all factory genuine parts, and insisted on PROOF of parts at repair completion. The insurance company (of the person who hit me) called me up and tried to bully me, but I insisted and they caved.
Aftermarket parts are ok. but you have to know what you are getting. I had a rock fall off a truck and take out my Caravan headlight and fender. I went after them and they ended up sending me a 'cash settlement'. At that point, I got a replacement fender from Keystone, and a replacement light kit. (I got to look at both of them before purchase.) I had the fender painted to match at a local body shop and bolted it on. The light kit was a simple drop-in. I ended up quite a bit ahead by doing the work myself. Mounting the fender and getting the seam exactly right took multiple tries over a full afternoon, but in the end you couldn't tell at all.
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Indeed...And some aftermarket parts are arguably better than the ones you would get at a dealership. I cite the plastic plenum issues of GM.
Many of the aftermarket suppliers actually are the manufacturers of OEM parts for Ford, GM, and Chrysler. They apparently can improve designs and upgrade parts much faster than the major manufacturers in some cases.
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If they use the manufactures engineered design as the basis, what you suggest would be an illegal patent infringement. ;)
mike

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At least not until the lower grade carbon steel, in that thinner gauge fender, starts to rust from the inside out, that is. LOL
mike

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After market parts do not carry the Brand name Ford, GM, Toyota etc., counterfeit parts do. Several years ago USS and Bethlehem steel were robbed of billons in fake hardened steel bolts, that were in fact only low cost mild steel bolts, made in Korea and stamped USS or Bethlehem Steel, in a similar scam.
If you bought a mild steel bolt to hold the blade on your lawn tractor, with the Bethlehem Steel ' I ' beam logo stamped on the head at the price of a hardened steel bolt, you got screwed as well.
mike

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Sounds to me like you need to invest in a dictionary, so you can look up the meaning of "counterfeit".
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I think it is a fair question. In some industries they yell counterfeit if somebody makes a cheap knockoff that LOOKS just like the high priced spread.
IMO, if you dont mislabel it as an OEM part, and if the part is not patent protected, then it aint a problem.
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I have some overarching patent law questions. Can a car maker even patent, let's say, a right fender for a Ford Focus? Can they patent a hood with the exact dimensions/bolt pattern that would fit a Ford F150? Can they patent an ABS module for a '99 Escort? Or can they only patent pieces of technology -- like a unique, never ysed before EFI system?
Or is this a matter of aftermarket vendors placing their "phony" parts in boxes with the Ford label, so consumers will think they're getting genuine Ford parts? Because, a lot of people don't want body shops to use aftermarket parts on their cars after collisions -- especially if someone ran into THEM, and the other driver's insurance is footing the bill.
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It may be possible to copyright a design?

That fits the traditional definition of counterfeit.
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One must not confuse 'Patent' rights with 'Copyrights' ;)
mike
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You can only patent items or processes which are novel and unique. If you wanted to patent a fender, you would have to show that it satisfied this novelty and that it is not simply an extension of what is already being done, in theory.
For example, if you developed a drivetrain control module which is substantially different and better in function than anything coming before, you might be able to patent it.
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The problem is not legitimate aftermarket parts. The problem is cheaply made parts that are sold as Genuine Ford or Motorcraft Parts. This is not a new problem. 20 years ago I can remember looking over the parts rack at a local alternator rebuilder. He had a Ford supplied poster that told you how to identify some of the common counterfeit parts. The poster showed things like slightly modified logos, or wording ("Motacraft" instead of "Motorcraft", boxes where the GT40 on the box was going in the wrong direction, other weird stuff). Amazingly, the shop had some of those very sort of parts on the shelf. It is one thing to buy aftermarket parts from a know reputable manufacturer, it quite another to think you are buying OE quality parts and getting poorly made knock offs. Many legitimate aftermarket parts or as good or better than OE parts. I have bought cheap parts in the past, but I knew they were made in China and not OE quality.
Ed
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I don't know, Jim. One might assume so. If the parts are clearly falsified, then the companies have a legitimate case.
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