Monday, April 19, 2010

As Congress debates ‘too big to fail’ here’s what the government is doing to Main Street…


As a Kentuckian who knows how badly we need more jobs, it's a shame to hear from a local hometown business who is genuinely trying to comply with the CPSIA, but finding that the costs are so great that they simply cannot afford the testing. Please read the letter I received below and if you have a similar story, email it to me at Commissioner_Northup@cpsc.gov.

"Last week we selected several more products to eliminate from our product offerings. The products are safe, do not violate any of the CPSIA standards and have been around for over 50 years, but they are too complicated and have too many different parts. Therefore they are too costly to have tested and retested over and over again to prove they are safe. I hope some small companies and some decent product selection can survive in this new world where all products are presumed to be guilty. The only survivors will be the ones that are safe and can also afford to prove they are safe.

The group of items that we decided to discontinue are several kinds of dolls that have lots of different colors and accessories and some plastic to test for phthalates. We would have an average about $1500/doll each time we had to test due to a batch change. If we order them 3 times per year it would be $4500/doll in testing costs to be certain that nothing had changed from any of the suppliers that provide the raw materials that make up the doll parts and/or colors and accessories. With 26 different types of dolls, that would come out to $117,000 per year we would spend on testing. Based upon our sales volume we would lose money every time we order the doll.

This week we are dealing with another toy item that had a piece of PVC pipe as part of the toy. We tested the pipe which is a common pvc pipe like millions of people have in their homes and drink water from each day. We found that the pvc is slightly over the minimum acceptable for one of the phthalates. We are now spending $12,000 (more than doubling the cost of the toy) to replace the pipe components and to expedite shipping so we minimize the amount of money and customers we lose to competitors for this item. If phthalates in water pipes aren't hurting anyone, then how can the pipe in this toy cause a problem? We are spending the money, delivering a revised toy at a loss and complying with the law because we fear being put out of business with a large fine, not because we are saving some child from a dangerous encounter with this product.

I guess we and other small companies will continue to shut down product offerings, reduce employees, reduce our income taxes and eventually there may not be enough money to fund the wasteful efforts from Washington. Nature has a way of correcting problems even if we aren't clever enough to do it on our own. I hope somehow we can find a way to curb this monster and get back to focusing on safety issues.”

2 comments:

Rick Woldenberg, Chairman - Learning Resources Inc. said...

Shame, shame on Congress. These issues are only going to get worse as the CPSC piles up rules small business have no chance of understanding, implementing or obeying. The supply chain has become so frightened of random regulatory events that people are making many decisions like this Kentucky company. It's entirely understandable, too.

The law needs to be changed to focus on REAL safety issues, not imaginary problems or phobias. As part of that reform, the CPSC will need to RE-WRITE the rules that bedeviling the regulated community. It's a terrible burden to put on the professional staff of the CPSC, but our markets won't survive without that additional work. The CPSC is just one of many victims of the CPSIA.

Alistair said...

The problem is that these companies are producing dolls made in this country. If the dolls were made in China the government would bend over backwards to make sure they were cheap and ready to sell. Give the jobs to Americans instead and all hell breaks loose.

This government will destroy this country and laws like this are the foundation.