It has become apparent that in today’s marketplace, far too many corporate management teams and manufacturers are focused almost solely on increasing sales—and of course profits—and lastly, if at all, assuring their products are safe and reliable. To further compound that problem, they are also making the false assumption that their employees know what to do with regard to preventing product recalls and product liability lawsuits. This area tends to be misclassified as one of “common sense,” with little-to-no need for training. As a result, we are faced with ever-growing upward trends in product recall statistics, record-breaking product liability lawsuit verdicts, and a spike in bankruptcies. It really doesn’t matter if you’re a $5 billion company or a $50 million one; whether you manufacture consumer products, automotive, medical, industrial, or commercial products; or whether you have a legal department or don’t have one—corporations are missing the mark across the board. This means they will also continue to suffer under the current trends until they begin to pursue training in these issues and do it from the top down. CEOs and corporate vice presidents are making mistakes just like the rest of the team, with countless news stories that support this claim. I have had GCs bring me onboard at numerous corporations to help educate their management teams on these issues. Product recalls are at record numbers, and have been growing every year for the past 6-10 years. Whether automotive products, medical devices, consumer products, or for that matter recalls throughout Europe, the problems are getting worse instead of better. Manufacturers of all kinds of products are recalling tens of thousands of their products, sometimes millions of them. With those key indicators displaying such negative trends, companies involved in industrial, commercial, and other untracked industries are logically facing the same issues. In my analysis, studying product recalls as they are being announced, one of the largest causes of these recalls is “Design Defects.” The product designs were defective from conception, as opposed to cases involving “Manufacturing Defects,” where some portion of the product was manufactured defectively. The first category of products contain defects in design that result in injury, accidents, sometimes even death, or that are simply failing to perform up to the expectations of the customer, and the manufacturer ends up having to recall the product. Once the manufacturer openly admits its product is defective and initiates a recall, it then opens the door to product liability lawsuits and even class action lawsuits, where negative statistics are climbing in parallel. If the manufacturer doesn’t recall the product, the same information will surface through the legal discovery process, and they will subject themselves to possibly huge punitive damage awards. Here are the primary focus areas that I see as needing improvement:
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