Filed under: Etc., Government/Legal, Ford, Earnings/Financials
Ford loses $1b due to counterfeit parts
In a study by the U.S. Chamber of Commerce and the Coalition Against Counterfeiting and Piracy, Ford Motor Company is said to be losing about $1 billion per year due to counterfeit parts sales. Ford states that the real cost could be much higher, as it's impossible to determine the potential costs in terms of reduced safety related to these parts.
Ford has a full-time staff that is tasked to pursue the manufacturers and resellers of these parts, but admits that legal action is very difficult to enforce outside of the US and Mexico. Other companies included in the survey included Merck & Co., New Balance, Xerox Corp, and Bendix, all of who experience similar issues with counterfeiting.
Next time you buy those knock-off parts for your ride, take into consideration that you are not only putting your life on the line, but also the countless other drivers on the road around you. Spend a few more bucks and get the right parts, right from the source or else a legitimate substitute.
[Source: MSNBC]
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Reader Comments (Page 1 of 2)
What up B 3:05PM (1/23/2007)
Who cares if they use counterfeit parts cause some of yall got knockoff gucci bags,Jordans,clothes,and more shit.So why can't Ford do it.Word to my mother B ford still my home boy anyway Real talk.
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aaron 3:19PM (1/23/2007)
Pretty sick state of affairs. This obviously has implications for every car owner and manufacturer.
I'd say unfortunately, the majority would go for fake parts if it saved them a buck, then look to sure anyone they could if the products failed. Standard human nature.
I'd love to see a few of these large outfits producing counterfeits go down.. I can ony expect that this problem will get worse too.
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HotRod 3:26PM (1/23/2007)
Key word: Counterfeit
If we buy what appears to be a real Ford (I assume Motorcraft) part how would we know the difference? If it is a reputable company then the only way to find out is if Ford exposes them.
Of course if we find a good deal on a "new Motorcraft" part on eBay then that is a sign that it may not be legit. But when was the last time you saw a good deal on eBay? I haven't, usually it is off brand parts at full retail prices.
What is to stop a bad Ford dealership from selling me counterfeit parts? Surely there are no dealerships who would do that, right? Not even those salesmen in the other story who stole from the 'mentally challenged' customer?
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Adam 3:49PM (1/23/2007)
The only thing they can say to help their situation is to scare people. They want to hammer the safety issue everytime so people pay over the top for geuine FORD parts. every after market glass and parts I have bought has been flawless.
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GhostDoggy 3:50PM (1/23/2007)
I didn't thing Ford buyers really cared if they owned a real Ford or a knockoff in the first place. Isn't the whole point of being a Ford fan is to own Ford Bling, even if its pasted or stenciled onto a Yugo?
I would think real Ford fans go into Ford dealership Parts Department to get real Ford parts--since cost ain't no object to a Ford fanatic.
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foo-bar 3:53PM (1/23/2007)
oh boo f*ckin hoo.. i'm sure the counter-fit parts don't cause spontaneous fires like the genuine Ford ignition switches do.. and maybe a counterfit gastank won't explode if hit from behind. This is just Ford bitchin and moaning that they're losing "one Billion" dollars instead of actually making & selling quality cars.
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infinihertz 4:03PM (1/23/2007)
Totally agree with #2.
#6, I'm going to assume you're saying that just to start an argument, because your logic is retarded. Ford is trying to cut several billions of dollars of cost. You should expect them to try to deal with a $1 billion+ counterfeit parts issue. We're talking about other companies breaking the law here. As for "instead of actually making & selling quality cars," look at the past year's quality data. No, they're not perfect, but neither is anyone else.
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mkbruin 4:17PM (1/23/2007)
You people are all retarded.
There is a difference between aftermarket parts and counterfit parts.
http://www.house.gov/knollenberg/mediacenter/speeches/2005/03.02.05a.htm
In addition to the obvious safety issues, counterfeit automobile parts cost the automotive supplier industry over $12 billion annually. It’s estimated that if these losses were eliminated, the auto industry could hire 200,000 additional workers. It’s important to remember those numbers, because counterfeiting is not a victimless crime. In addition to selling bogus products, the counterfeiters are stealing jobs and money away from legitimate companies, destroying brand names, increasing warranty claims, and requiring legal fees and costly investigations. And if counterfeiters are having an impact on auto suppliers, they are going to have an impact on the aftermarket. You don’t want fakes on your shelves or in your shops. You want the real product, so you can build trust with your customers. There are also strong relationships between auto parts makers and auto parts stores – and both industries want to see the other as successful as they can be. The fight against counterfeiters is not limited to the automotive industry. The impact of counterfeiters is broad. When it comes to the economy overall, the U.S. Customs Service has estimated that counterfeiting has resulted in the loss of 750,000 jobs and costs the United States around $200 billion annually. The International Chamber of Commerce estimates that seven percent of the world’s trade is in counterfeit goods and that the counterfeit market is worth $350 billion.
The counterfeiting of automotive parts continues to be a major issue in the automotive parts industry. Counterfeit parts pose safety issues as poor quality substitutes of original parts and affect companies’ reputations. The Motor and Equipment Manufacturers
Association (MEMA) estimated that counterfeit automobile parts cost the American automotive supplier industry over $12 billion annually. Counterfeiters are taking jobs and money away from legitimate companies, destroying brand names, increasing warranty claims, and requiring legal fees and costly investigations.
A 2005 study by Frost and Sullivan found that counterfeit and gray market automotive components accounted for as much as 3.2 percent of all global counterfeit trade and that automotive parts counterfeiting is increasing at an annual rate of 9 to 11 percent, which is 1 to 2 percent higher than the average. The Frost and Sullivan study found that most counterfeit goods are still coming from China because the laws are more lax and socialeconomic structure supports counterfeiting. Several bills have been introduced in U.S. Congress to strengthen U.S. laws against counterfeit goods sold in the United States.
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Sean Lawrence 4:21PM (1/23/2007)
Anyone that has had to buy Ford parts or those of related companies (Mazda) knows that there is a perfectly simple solution to the problem. Stop charging such obscene prices for the parts! Pricing the parts lower removes the incentive to counterfeit.
Anyone that owns a Ford (or related) product will someday be faced with the option of selling the car or getting hosed by maintenance costs. But since fewer Americans actually work on their cars, most will never know.
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Peter G 4:29PM (1/23/2007)
Really? Who that is really price conscious, goes looking for "genuine" ford parts on ebay or where-ever you get ford knockoffs. I wouldn't think the market is that big.
I have a ford. I go to an independent mechanic. I use generic brake rotor/pads etc or anything else that I need. This is neither dangerous, nor illegal and I suspect this what most of the market is doing.
Ford seems to be engaged in a little fear mongering to get people to buy overpriced "genuine" ford parts.
I lost a plastic hubcap. Ford wanted $60 for one freaking plastic hubcap. I picked up a generic for around $10. Years later now and the generic held up much better than the Ford caps.
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mkbruin 4:47PM (1/23/2007)
sean lawrence, before you continue your nice little ford bash (feels good, huh...) keep in mind, we are not talking about purchasing Raybestos instead of Ford branded brake pads. We are talking about black or grey market parts shipped in from China or the like and sold at far below even standard aftermarket prices. Said chinese grey market brake pads that joe shmoe buys to save $10 fail and joe sues ford.
Ford doesn't care that you buy your parts from Checker, Napa, Pep Boys, Advance Auto, or a dealership. They care that you are putting a $.05 brake pad made without any form of quality control or checks on your 5000lb SUV.
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fordman 4:58PM (1/23/2007)
I agree with number 4 and number 11
Ford is just fear mongering as usual. We are very fear consiuos people whether its terrorism or auto parts, we can scare easily. If ford would reduce their prices to about double, they would cut this down by a large margin. A ford hood for my Ranger was 910 dollars. I bought one from e-bay for 200 brand new in a box. Yes it said made in taiwan, so what. The hood had braces everywhere. It was not a flimsy tin sheet. It had all the crumple zone fastening and look IDENTICAL to my old hood. I am very happy with it.
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Elliott 5:00PM (1/23/2007)
It seems like several people have already pointed it out, but just to clarify again: Ford is not trying to keep company "XYZ" from selling you parts for your car, Ford would like to prevent company "XYZ" from illegally labeling their parts as "Ford Genuine".
Many aftermarket parts have fine quality, but the box should have the name of the company that made them on it. The poor quality/safety issues arise when someone buys a box labeled "Ford", but the parts were actually put together by a company or individual too ashamed/scared to put their own name on the box.
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Jeffery 5:06PM (1/23/2007)
mkbruin, you are exagerating. First of all. Ford had revenue of 177 billion last year. GM had revenue of 262 billion last year. Thats 400 billion in between them. How can 12 billion extra in revenue for all automakers create 200,000 jobs in america?
Ford with 177 billion in revenue only has 133,000 jobs and they are shedding that to 95,000 within two years.
Also, your logic makes it sound like fordman will die if he gets into a crash with his taiwanees hood when in fact numerous, but not all, but numerous non genuine parts are identical to genuine parts.
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Snix 5:09PM (1/23/2007)
I'll bet those counterfeit parts are made in Taiwan or Mexico....oh wait, arent the "Gen-U-Whine" Ford parts made there also?
Give me a break.
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geroge1980 5:14PM (1/23/2007)
If Ford got royalty of even 1 sent for every part sold by a counterfeiter, they would drop the issue. Because they dont get even 1 cent out of it, they come out swinging that people are dying by the bushel.
Typical America.
When you cant play ball, sit on the sideline and Bitch.
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Will 5:20PM (1/23/2007)
#14-
Nice point, but flawed logic explaining it. Why?
Because not even genuine Ford parts are made by Ford. Pretty much all auto manufacturers purchase from outside vendors for replacement (hell, even oe) parts. You are not guaranteed what factory built your part even if it is Ford genuine. Again, #14, someone else's parts in a Ford box. Sure, Ford has quality requirements that the factories must meet, but what if for sources one part from three different plants, and one of the plants has a decline in quality after Ford certifies them?
You are better off just saving your money and buying a quality aftermarket part to begin with. I never could understand why someone would pay twice as much for a part in an OE box, when the aftermarket part is the same thing often times assembled on the same assembly line. The worst offenders are the Mopar fans.
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Alec 5:24PM (1/23/2007)
People stop buying counterfeit parts!!!!!
You are a killer!
You kill jobs by eliminating 200,000 mkbruin talks about,
and you are a killer by getting into car accidents!
Stop the killing!
Pay through the nose for parts next time.
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r.yo 5:40PM (1/23/2007)
mkbruin, i feel your pain. Perhaps what you said bears repeating:
COUNTERFEIT does not mean AFTERMARKET.
An aftermarket brake pad says something like "Raybestos" on the side and is built by a reputable company as an alternative to the official Ford/Motorcraft service part.
A counterfeit brake pad says "Frod Motorkraft" and is made from compressed sawdust and sold out of the back of a van to unscrupulous repair shops that are billing the customer (or, more likely, the insurance company) for the full price of a genuine part.
Consumers generally do not know they are getting counterfeit parts; THAT is the problem.
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Mike 6:16PM (1/23/2007)
Thank you to the few of you who have brains enough to distinquish between the words "aftermarket" and "counterfeit".
No one is saying you have to buy Ford or Motorcraft parts, but #20 was right, they will say something like Motocraft (notice the missing r in motor) or have similar looking packaging to copy the Motorcraft logo on their box closely but not exactly.
Meanwhile they take no responsibility for the certain failure and you go sue Ford over a part they didn't make, order (if it was made by a supplier), or most importantly- durability test.
Also for those of you who think the manufacturers are ripping you off on the price of parts, understand that the testing and quality controls on those parts are second to none. While most aftermarket parts are acceptable, they are not tested to the stringent standards that the OEM tests to. That is what you are paying for- and anyone who has used aftermarket alternators/starters/power windows and tries to tell you that they are just as good either has no experience or is lying.
Oh and by the way, Motorcraft, Goodwrench, etc. are the lower priced brand parts that are offered by the OEM but are closer to aftermarket quality than OEM. Have you compared the price of a Motorcraft/Goodwrench and Fram filter or Motorcraft and Raybestos brake pads? Their not that far off.
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