Since May is National Electrical Safety Month, I thought I’d take a break from writing about the economy and, instead, devote a column to what we, as contractors, should do to protect our workers and customers from electrical hazards. Even so, I couldn’t get away from the subject of economics entirely.
The Electrical Safety Foundation International (www.esfi.org), which is co-sponsored by the National Electrical Contractors Association (NECA), spearheads the annual observance and has launched its “Buyer Beware Anti-Counterfeiting Campaign” as the focal point of National Electrical Safety Month 2009. NECA, as well as the National Association of Electrical Distributors (NAED), the National Electrical Manufacturers Association (NEMA), Underwriters Laboratories (UL) and leading electrical manufacturers have likewise stepped up efforts to combat the counterfeiting of electrical products and components because we realize it is a vast and growing problem.
Here’s where that unavoidable subject comes up: The U.S. Chamber of Commerce estimates that product counterfeiting costs the U.S. economy between $200 billion and $250 billion annually. According to a recent report by U.S. Customs and Border Protection, the value of all seized counterfeit products for the year ending Sept. 30, 2008, was nearly $273 million, an increase of 38 percent over 2007. This figure includes a 43 percent increase in seizures of counterfeit electrical products, with a total value of about $23 million. And that’s only the counterfeits headed off through sporadic inspections at U.S. ports—an exceedingly small portion of the total that make their way into the supply chain.
Another perspective on the economic connection comes from ESFI President Brett Brenner. He said the current financial crisis has “essentially acted as a catalyst within counterfeit consumer electrical products. People are going to great lengths in search of a bargain, favoring alternative online vendors, which is where these substandard products are likely to be found.”
However, Gallup Consulting and the U.S. Chamber of Commerce estimate that 64 percent of counterfeit electrical goods in the United States are purchased from legitimate shops and retailers. If you are ever tempted to save $1 on a $2.50 part or even a much more substantial amount, whether from a known dealer or an online source, you could be in big trouble if you purchase a counterfeit that malfunctions and causes harm after you install it—millions in fines for you personally, millions more for your company, even prison time.
And, of course, that is not the most severe consequence.
I like how John Maisel, the publisher of this magazine, characterizes electrical counterfeiting: “This is a multimillion-dollar problem. Not only is there a loss of dollars for manufacturers, electrical contractors and distributors, but there is a loss of image, as well,” he said. “More important than either of those is the loss of life when a knockoff product causes a fire or electrocutes a homeowner.”
According to the U.S. Consumer Product Safety Commission, there are more than 50,000 home fires each year across the nation that directly involve an electrical malfunction, causing more than 2,800 fatalities, countless injuries and $1.4 billion in property damage. Circuit breakers that fail to trip when overloaded, extension cords that overheat, ground-fault circuit interrupters that prove useless, and other electrical products and components produced by counterfeiters spark a lot of these fires. Counterfeiters use inferior materials and avoid key manufacturing steps, so they can sell their junk at prices no genuine manufacturer can beat.
For all these reasons, last fall, NECA adopted a standing policy opposing electrical counterfeiting. The proclamation was followed by direct action within days when this magazine, published by NECA, and NAED’s TED magazine launched the Anti-Counterfeit Products Initiative. It is endorsed by both organizations, as well as NEMA and UL, and sponsored by Siemens, Schneider Electric/Square D, Alcan Cable, Graybar, Fluke Corp., Eaton, Southwire, GE and NSi Industries.
The effort includes the establishment of a Web site (www.counterfeitscankill.com), which provides a lot of information on how to spot counterfeits and what you can—and must—do to halt their proliferation. A recording of the in-depth Webinar presented last month by ELECTRICAL CONTRACTOR and TED magazines is included. I urge you to explore this site in its entirety, study it in detail, and put its recommendations into practice immediately. A casual look is insufficient. Electrical counterfeiting is a deadly serious business. Each of us should make it our business to help end it for good.