I try not to look for too much wisdom in movies – perhaps at least not beyond the Solomonic wisdom of “Blazing Saddles” or “Dude, Where’s My Car?” anyway. But there was a line from the 1980s film “Field Of Dreams” that has always stuck with me.
An old man, lamenting his one-day stint in the Major Leagues in which he never got a chance to bat, observed that “we just don’t recognize the most significant moments of our lives while they’re happening.”
I thought of this in light of two different occurrences in two different continents that may, in retrospect, turn out to be extremely significant for the engine-powered equipment industry, both here and across the world.
One was the $5 million in civil penalties that national auto parts retailer Pep Boys and its importer were hit with over the import and sale of Chinese motorcycles, recreational vehicles and generators that did not comply with EPA clean air standards. It’s considered to be the largest vehicle and engine importation case to date and the largest penalty ever.
Pep Boys sold at least 241,000 illegal vehicles and engines from 2004 through 2009. As the case (surprisingly) revealed, Pep Boys was the third largest importer of Chinese-made all terrain vehicles into the U.S. and in 2006 and 2007, it was the fourth-largest importer of generators.
Over the last several years I have seen – at local hardware stores and even in one case a discount grocery chain – small engine powered equipment for sale at low, low prices. Things like 5 kW gen-sets for $299, garden tillers for $100 and light motorcycles for $250. You can never really find anything that says who makes them or where they come from, even though in many cases, the livery, logos and badging mimic well-known brands. But it’s clear from the impossibly small price tags that these are knockoffs and even if the labeling doesn’t say “Made In China” clearly anywhere, there is little doubt as to where they originated.
In some cases, I’ve seen stickers on the machines that indicate that they are “certified” to meet emissions -clearly an impossibility at those price points. Clean air requires money and the cost of compliance has been reflected in the rising price of even the smallest equipment. There is no getting around that, no matter where it’s manufactured or how cheap the labor is.
It’s been noted in some corners that a $5 million penalty to a $1.9 billion company amounts to less than a slap on the wrist. That may be true, but any figure that has a dollar sign on the left side and six zeroes on the other is absolutely going to get the attention of the company’s management, no matter how big. It ain’t peanuts, even to Manny, Moe and Jack.
And in this era, nobody, but nobody, wants to be perceived as being anything but very green. Especially when selling to consumers.
Chances are, Pep Boys was ratted out by some customer or possibly even someone that sells generators who happened to see some of this equipment sitting in a shop somewhere and made a call or sent an e-mail to EPA. Hat’s off to that person and also to the EPA and the Justice Department for stepping in.
Hopefully, this kind of thing will become a trend. A few more high profile events like this and maybe we can all breathe a little easier (especially those companies that make and sell gen-sets).
The second event that may ultimately be seismic in its impact also involves China. This one occurred in Germany, at the recent Bauma 2010, when English equipment icon JCB convinced a German court to issue injunctions against a pair of Chinese manufacturers over loaders that JCB said resembled its own backhoes and Loadalls a little too closely.
The result was that machines were either covered up or taken off the show floor. That would be a huge thumb in the eye in any venue, but even more so for it happening at Bauma, even one humbled somewhat by an Icelandic ash cloud.
A JCB official noted that “JCB invests many years and many millions of pounds developing and innovating new products and it’s clearly unfair for any manufacturer to then simply free-ride on the results of that investment and research. As an industry we all have to unite to prevent such unlawful practices.”
Hear, hear!
Those old enough (like me) to remember when “Made in Japan” was synonymous with “Cheap Junk” can see parallels in a number of Chinese manufacturers that are evolving into high-quality suppliers of engines, components and equipment. It won’t be long until they will compete head-to-head with the global leaders from other regions and win their share fairly. No one begrudges them their opportunities.
But there are those other kinds of Chinese manufacturers, the ones that specialize in reverse engineering and making things that look and feel just like the real thing, only at a third the price. They do so by mimicking the intellectual property and designs of others. And when all you do is copy something, you’re almost sure to miss some things, like machine safety and emissions compliance.
The very public incident at Bauma is likely to have shamed and embarrassed some Chinese manufacturers. And it’s likely to encourage others to follow JCB’s lead and insist that legal authorities enforce the rules that everyone has to live by. We can only hope for both of those things.
Two events, thousands of miles apart … maybe they’ll be the things we look back on as the start of much bigger things.