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Caveat Emptor (Buyer Beware!)

xBy John Cannell

We are rapidly moving toward a world economy whether we want to, or not. Pick up anything lying on your desk or your kitchen table, and you will see “Made in China/Taiwan/India/Mexico/Brazil, etc. etc. Even name brand products which have long been the backbone of the North American market are being sourced overseas. At the present time, China is, by far the major source for low priced manufactured product. Is this good, or bad?

Human rights activists, dedicated anti-communists, and those who just plain fear a growing competitor with a population exceeding one billion, will say this is all bad. On the other hand, huge department store chains, hardware chains, automotive parts manufacturers, discount stores, etc. gladly take advantage of China’s low labour cost and high productivity, to buy cheap and ace the competition.

Trouble is, the competition has little choice other than to do the same thing, and, like the early days dealing with Taiwan, the only way to enjoy loyalty from your supplier is to buy more than your adversary, so you can sell at a lower price. Another problem, which, invariably follows, can be the problem of diminishing quality.

As prices drop, orders pile up, production schedules cannot be met, and build quality often becomes a casualty. This may not be a prime consideration with cookware, jackets, shoes, or CDs, but what about automotive equipment? In particular, vehicle lifting equipment?

The following applies to lifting products sourced anywhere in the world, but, particularly to those produced in countries who are relative newcomers to the lifting market, and sell on a “mine is cheaper than yours” marketing philosophy.
Lets paint a scenario (all of the following names and companies are totally fictitious, and any similarity to real names or companies is purely coincidental) .

Joe Leblanc in Montreal, is a minor player in the automotive equipment market.  He is approached by the agent for Chow Mein Ironworks, an offshore manufacturer who has decided to venture into the lift business. This manufacturer is subsidized by his government to the extent he has a virtual payment guarantee. Joe discovers he can buy a container of offshore lifts at an unbelievable price.

A contract is signed, and the significance of a paragraph in the contract which reads, “Chow Mein Lift Company is a limited liability company”, does not seem important to Joe at the time. He just sees $$$$$$.

Joe Leblanc, operating as J-L Automotive Equipment places some advertisements in local papers, and picks up a few jobbers, mostly one-man operations we usually refer to as ‘MWOTs’ (Men with old trucks). These are people who install and repair lifts, deriving much of their business from the annual lift inspection requirement existing in most provinces. One of these, lets call him Fred’s Repair Service sells a Chow Main lift to Terrific Tire Sales Ltd., and installs it, complete with a first year inspection sticker.

Six days later a catastrophe occurs! A one ton dual wheel diesel truck comes into the tire shop and the mechanic decides to put it on the new hoist, since it is quite heavy at 8600lb, but, well within the claimed 10,000lb capacity of the lift. The lift seems to have a little trouble raising the load, but it does, eventually, reach full height.

The mechanic walks under the truck to ascertain what tools he will need, returns to his workbench, then wheels his toolbox under the lift, and prepares to perform the planned service procedure. Suddenly, with no warning whatsoever, the carriage welds on the left side of the lift all break in sequence,  followed seconds later by the right side welds.  The lift drops like a stone along with the truck seriously injuring the mechanic, and virtually demolishing the lift along with the truck.

The safety latches were not involved because the arm support brackets broke loose from the carriage which remained aloft supported by the cylinder and cables. It is now insurance company and lawyer time. The mechanic’s life was saved by his toolbox which prevented the truck from reaching the floor, nevertheless his injuries are very serious, and it appears he will not be able to work again.

The truck must be replaced but this falls under Terrific Tire’s liability insurance, provided by Ace Insurance Ltd. The hospitalized mechanic has been interviewed by Workman”s Compensation,  his statement has been signed and recorded,  and his employers at Terrific Tire have similarily given their statement.   Ace Insurance follow much the same procedure,  so that both entities are now aware who sold the lift (Fred’s Repair Service),  who distributed it, (Joe Leblanc as J-L Automotive Equipment Ltd.), and who built it (Chow Mein Ironworks).

The investigation begins, and like all things involving litigation, it proceeds slowly.  Eventually, however, the facts are ascertained as follows.   Fred’s Repair Service is not a limited company, however, the owner’s assets consist of a small house and workshop with a large mortgage, a pickup truck, and a small car.   He has a small bank balance and a small line of credit at the bank.   

The distributor,  J-L Automotive Ltd.,  is a limited company,  which, strangely enough,  has ceased operations and  has vacated its rented premises.  The phone is also disconnected.  Rumour has it that several of these lifts suffered similar catastrophic collapses, and. since, under Canadian law the “Importer of record”  is liable for such matters,  Mr. Leblanc decided to fold up the company, and leave for parts unknown. 

In circumstances such as these, it might be possible for lawyers to go through the corporate veil, and obtain some satisfaction from Mr. Leblanc, if they can find him, and if he has any negotiable assets.  Now we move on to the Chow Mein Ironworks.  Remember the clause in J-L’s contract with the offshore manufacturer, which states they are a “limited liability company”? 

Their agent simply refers all inquiries to this clause, and other similar conditions of their contract, which, effectively renders them invulnerable.  Besides, even if they did not have this protection,  good luck chasing them down in the Orient.   After all aspects are weighed and examined,  it turns out that the only solvent player in this game is the employer,  Terrific Tire Ltd.  

With 20 employees,  two branches,  two properties,  receivables,  substantial inventory,  plus fixed assets, the hard working owners of  Terrific could come up with the funds to pay Workman’s Comp who, in turn pay the injured mechanic, with, of course, expenses added.  

Not fair, you say?  Probably not,  but when you buy an unknown product,  manufactured in a foreign country with totally different standards and ethics, at a price  much cheaper than established locally manufactured and supported   product there are, clearly, risks involved.  

If a product is much cheaper, there is a reason. Again, as they say on the South Shore, “You don’t git nawthin for nawthin!” The foregoing account is fictional,  but similar events have occurred, and people have been hurt, both physically and financially.  Does this mean all offshore equipment is crap?  No, of course not, however, whereas these manufacturers are, at least for the present, only interested in manufacturing rather than merchandising, they will make whatever you want, as good, or as bad as you want it.

A similar situation is beginning to emerge with respect to other devices such as tire changers and wheel balancers,  however these do not have the potential for injury and property loss incumbent in 8500lbs of dual wheel one-ton, suspended over your head.

What can you do to protect yourself?  First of all, you apply a little logic.  If the hoist is hundreds of dollars lower than name brand products,  and it is being sold by  small one-man operations, could it be possible,  there might be a quality problem.  

Does it have any approvals?   Does the manufacturer offer a clearly stated warranty wherein the coverage is fully explained?   “This product is guaranteed for two years” is not acceptable.  You need to know what parts are covered, and how the warranty is administered.  Is the labour covered?  Is there someone in your area to look after the warranty?  Is this person someone you trust?  Are parts stocked locally? 

You may have saved $500.00 on the lift, but if your three bay shop is tied up for a couple of weeks waiting for parts, that $500.00 is long gone, along with a lot more money.
Can the manufacturer show you a current copy of his liability insurance, which should be for, at least, five million dollars.  Does the seller/installer have liability insurance?  Does he have workman’s comp coverage so that any injury he may occur on your premises is not charged to YOUR WC coverage?  

Take a look at the hoist when it arrives, especially the welds.  Take note of the column steel thickness.  Is it a one piece design or is it welded up from several strips of steel?   Does it use equalizing cables, (good) or, does it rely on a hydraulic valve for equalization (not so good)

Check the arm thickness.  Do they slide in and out easily?  Does the inner arm fit the outer arm snugly, or does it look like it will sag under load? Do not be afraid to do this.  Your life or that of your employees is on the line here.  If you, or your technicians do not like the look of it, do not accept it!  Why gamble?

Does the product meet accepted lift standards?  In Canada, the only home-grown standard we can apply is CSA (Canadian Standards Association) which, in the matter of vehicle lifts applies to the electrical components, mainly the electro-hydraulic power unit.  Nevertheless, if the motor and controller on your power unit does not have CSA approval, you could have insurance problems in the event of a fire, even if  it was not the cause of the fire.  Check with your insurance agent.

Most of the other standards were born in the USA.  The one recognized as the most significant is ALI  (Automotive Lift Institute) which was formed in 1945 along with the post-war rebirth of the lift industry.  In 1993, ALI  decided to embark on a third part testing program to back up their certification which had been, to that point, a self policing procedure on the part of the manufacturers.  ALI formed an alliance with ETL (Originally, Edison Testing Laboratory  now part of  Intertek Services NA Inc.) , a leading testing laboratory meeting OSHA (Occupational Health & Safety Administration)  standards.

ETL tests the lift to insure compliance with ANSI/ALI ALCTV - 1998, and ANSI-UL Standard 201, and periodically visit the factory where the lifts are made.  The central requirement for lifts to pass certification is for the lift to support three (3) times its rated capacity without catastrophic failure.  In other words a lift  rated by the manufacturer at 10,000lb total capacity must be able to support 30,000lb  in the test sequence.  

Because it is possible for a manufacturer to build and submit, a ‘specially built ‘ lift in order to meet the standard, the test lift must come from day-to-day production, and ALI will visit the factory from time to time to police this. The ALI/ETL standard  requires universal warning labels,  paint standards,  manuals, on-site training, etc. Some lifts are still built to the previous ANSI/ALI B153.1 - 1990 National standard  however, this standard is obsolete and no longer applicable.

ANSI/ALI ALCTV 1998 and ANSI/U.L. STANDARD 201 are the current ones.  Some lifts are built to no standard at all!!  You really don’t want to stand under these! Other standards include ISO-9001 certification, an all-encompassing sequence of specifications requiring all aspects of the company to conform in order to obtain EC type examination certificate. 

Rotary is the North American manufacturer with this certification.  As well, you will see the “CE” standard which is the European requirement, and  “TUV” the German certification.  For more information on any of these standards, simply log on to the ALI website, or, simply Rotary here.  Check it out!  

Live Long And Prosper! You can contact John in Saint John here.