UNION, N.J. — After a lifetime in the tire business, Richard Kuskin faces a recall his company can´t pay for.
Foreign Tire Sales Inc., the Union-based company of which Kuskin is founder and president, is the manufacturer of record in the case of 450,000 Chinese light truck radial tires it imported from Hangzhou Zhongce Rubber Co. Ltd.
After FTS notified the National Highway Traffic Safety Administration of the alleged problem-insufficient gum strips between the belts, increasing the possibility of belt and tread separations-NHTSA ordered FTS to conduct a recall. The company estimates the cost of the recall at between $50 million and $80 million, and it has funds sufficient to cover maybe 10 to 15 percent of the cost.
FTS postponed the start of a recall, planned for July 16, while Hangzhou provides NHTSA with more information.
The importer also faces a product liability lawsuit in the Philadelphia circuit court and a class action seeking certification in the New Jersey federal district court.
If the cost of the recall should bankrupt FTS, what will the future hold for Kuskin?
"To be honest, the situation I have is so in front of me that I´m not able to think of the future," he said. "I really haven´t thought it through."
The son of a commercial tire dealer, Kuskin, 59, went into the tire importing business with a Korean friend, a fellow student at the Stevens Institute of Technology, after their graduation in 1972. After dissolving the partnership with his friend, Kuskin founded FTS, importing tires from China, Thailand, Mexico, the former Yugoslavia and other nations.
According to FTS´ defect report to NHTSA, the importer first contacted Hangzhou about supplying tires for the U.S. market in 2000. Tests performed the following year indicated the tires could run 40,000 miles without belt or tread separation, and shortly thereafter, the two companies signed a contract.
In October 2005, however, FTS said it began to notice that adjustment rates on Hangzhou-made tires were skyrocketing. A new round of testing in May 2006 showed problems with the tires´ construction that had not existed before, the importer said, and FTS dropped Hang- zhou as a supplier immediately.
Even before the adjustment rates began to rise, Kuskin said, FTS had intimations that things had changed at Hangzhou by the way company executives treated Gary Eiber, FTS´ full-time engineer, when he visited the Hangzhou plant.
"When Gary would go to the factory, he´d be very much disrespected," Kuskin said. "He wasn´t allowed to inspect the facility, or inspect cut sections of tires on wheels. Gary´s a West Point graduate, and when they tried to set up a smokescreen, he called them on it. He just saw through it, and they didn´t like him because he wouldn´t play games with them."
Hangzhou has met with NHTSA and claims its tires aren´t defective. The company has asked the agency to independently evaluate the tires.
This isn´t the first time FTS has had problems with Chinese-made tires. Early this year, NHTSA turned down FTS´ September 2006 petition for a finding of inconsequential noncompliance on 18,900 bias-ply intermodal truck tires, size 10.00-20, made by Wendeng Sanfeng Tire Co. Ltd.
The tires lacked a single load-carrying designation required by NHTSA.