US company faces fines for tire recall

US company faces fines for tire recall

	Published : Thu, 28 Jun 2007 18:10 By : Agencies Print this Story

WASHINGTON (AP) - Federal highway safety officials say the New Jersey company being ordered to recall as many as 450,000 faulty tires imported from China faces millions of dollars in fines if it fails to properly remedy the situation.

The National Highway Traffic Safety Administration sent Foreign Tire Sales Inc. a letter stating that it is legally responsible for the recall and faces penalties of up to $6,000 per violation, with a maximum of nearly $16.4 million for any series of related violations.

The government, which has given the company until July 2 to respond to the letter sent Tuesday, said the company's argument 'that it is not in a position to conduct a recall is not acceptable.'

But an attorney for FTS said Thursday that the company can afford only about 10 percent of the roughly $80 million in expenses associated with a full recall.

'FTS will comply with every law, every rule, every regulation, every directive to the extent the money holds out,' said Larry Lavigne of the Norris McLaughlin & Marcus law firm in Bridgewater, N.J. Lavigne said FTS is working on its reply to the government, and he hopes to submit it prior to the deadline.

The company sent the highway safety agency a letter earlier this month that said up to 450,000 light truck radials imported from China-based Hangzhou Zhongce Rubber Co. could suffer tread separation because they were made without a safety feature that helps bind the belts of a tire. FTS said it does not have the financial resources for a full recall and would be forced to file for bankruptcy if required to conduct one.

Meanwhile, Hangzhou Zhongce on Wednesday denied that it supplied faulty products and accused FTS of making the claim to bolster a lawsuit it filed against the Chinese company in U.S. District Court last month. In that case, FTS says its tests found that the tires may fail early and it is seeking unspecified monetary damages and an injunction that would bar Hangzhou products from being imported.

Also last month, FTS said it was served with complaints alleging that the tread of a Hangzhou tire separated causing a van to roll over and resulting in two deaths and a significant brain injury. Those cases -- Joao Paulo DaSilva v. General Motors Corp. and Robert McCulley v. General Motors Corp. -- were filed in the Court of Common Pleas in Philadelphia.

The affected Hangzhou tires were sold under the Westlake, Compass, Telluride and YKS brand names in the following sizes: LT235/75R-15; LT225/75R-16; LT235/85R-16; LT245/75R-16; LT265/75R-16; and LT3X10.5-15.

The tire recall comes amid rising safety concerns involving other Chinese exports. Imported wheat gluten tainted with the chemical melamine was blamed for recent dog and cat deaths in North America, and U.S. inspectors also have banned or turned away frozen fish, juice and toothpaste from China due to high levels of toxins or potentially deadly chemicals.