The Consumer Product Safety Commission (CPSC) has taken an extraordinary and potentially fatal unilateral action, issuing a public warning calling youth ATVs imported by Kazuma Pacific, Inc., unsafe.
The Meerkat 50 warning may sound the death knell for the the Stafford, Texas, distributor of ATVs, UTVs and karts, the company president said.
"Who will be interested in Kazuma ATV after CPSC done the
announcement?" said Jason Tsai, Kazuma Pacific president. Not just 50cc, all our products, 90cc, 110cc, 150cc, 250cc, 500cc, 800cc not selling now...I believe the company will be forced to close in the near future."
Normally when the CPSC staff identifies a safety issue, the company works closely with CPSC staff to manage a voluntary recall process. That was not the case in the Kazuma situation.
"It's extremely rare for this agency to do a unilateral safety warning about a product that should be recalled," said Scott Wolfson, CPSC deputy director of public affairs, told Dealernews. "We take a great deal of pride here at CPSC in that we do about 450 recalls a year and all are voluntary and cooperative. This type of announcement has not been made in a very long time."
Kazuma Pacific has refused to provide incident data on any of its products, says the CPSC. In fact, 'Kazuma Pacific has impeded CPSC's efforts to protect the safety of children," says the CPSC in its announcement warning the public about the possible dangers of the Kazuma youth ATV, "by refusing" to implement a corrective action plan for this ATV.
Tsai denies stonewalling. "This saying is not true," he told Dealernews. As soon as we received the CPSC letter on Dec. 12, 2006, we informed the factory immediately to stop shipping any Meerkat 50 to KP and modify the Meerkat 50 quickly to comply with CPSC demand."
Kazuma Pacific continues to sell the Meerkat 50, says the CPSC, but the company disputes that statement. "This saying is not true," Tsai said in a statement sent to the Delmont Report. "KP had stop selling Meerkat 50 since March 7, 2007."
The company has sold at least 2,700 of the units, according to the CPSC, but that number could be very low, according to sources contacted by the Delmont Report. The number of units sold could be more than 20,000 units, say our sources, but Kazuma told Dealernews it sold about 3,000 units last year.
"The company failed to meet its obligation to safety," said Wolfson. "They were not responsive to government requests for information and refused to come to the negotiating table to carry out a recall with us. They refused to work with us at all. This is a recalcitrant company."
Tsai said there has been only one accident involving a Meerkat 50 in the last seven years, and that involved operator error.
He also said that the Meerkat 50 isn't covered by ANSI (American National Standards Institute) standard because that applies only to ATVs powered by engines of 70cc and larger. The Meerkat 50 has a 48cc engine.
"[The Meerkat 50] should be classified as a moped not (a) vehicle," says Tsai. "It is a toy for kids to play [with], not to travel."
Tsai said it is possible to build a new Meerkat 50 with the safety features specified by the CPSC, but modifying the existing design will "damage" the frame structure and change the unit's center of gravity, making it "even un-safer (sic)." Additional welding, he said, would damage the structural integrity of the frame.
Kazuma Pacific does not have sufficient capital "to support the recall and refund,"he said.
In its consumer warning announcement June 5, the CPSC said the Meerkat 50 had "several serious defects." These included a lack of a front brake, no parking brake, no neutral indicator light, and that it can be started in gear, says the CPSC. Additionally, the owner's manual does not contain sufficient information on safe operation and maintenance of the ATV.
"The Meerkat 50 doesn't fall within the voluntary safety standards," says Wolfson. "It lacks many of the core safety features that the majority of youth ATVs meet today."
The Meerkat case is especially important, says Wolfson, because "it speaks to the work we are doing here (at the CPSC) that would change voluntary standards to mandatory ones and would bring companies like Kazuma into the same arena (with other companies)."
The safety standards under development, if implemented, could level the playing field for all manufacturers in terms of manufacturing costs for including specific features on ATVs.
Even though it took the unusual step of announcing its concerns without participation of the company in question, the CPSC was not able to force Kazuma to recall the faulty units.
The CPSC is run by a three-member commission and a quorum of all three members is required for it to take legal action. The CPSC has been without this quorum since January.
"Traditionally," says Wolfson, "in this type of case where we have a recalcitrant company and we have evidence that a product should be recalled and they will not recall it, we go to the Commission to ask for approval to take administrative legal action to compel the company to make a recall. We can't do that because we don't have a quorum. We can't go to an administrative law judge to compel a recall."
The Meerkat announcement followed a recall of a Chinese manufactured youth ATV last month. Stateside Powersports of Bluffton, Indiana, agreed May 3 to recall about 100 of the Long Chang Lion 90cc ATVs. The machines were sold online and through dealerships between May and December last year for about $1,000.
Stateside voluntarily conducted the recall in cooperation with the CPSC, according to the agency. The CPSC said that the Lion lacked "adequate tire labeling, tire pressure gauge, stop engine switch and other safety requirements" which could result in injury. No injuries were reported, but consumers should stop using the product immediately, says the CPSC.
It's very likely that additional recalls will be made. "We are continuing to look at foreign-made youth ATVs," says Wolfson.
Joe Delmont is an award-winning business writer and editor. He's editor and publisher of the Delmont Report newsletter and the B2B website, PowersportsUpdate.com. He can be reached at firstname.lastname@example.org or 952/893-6876.