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Fake engineering products are costing ‘thousands’ of jobs

11 April, 2007

In a dramatic ceremony in Germany recently, SKF and Schaeffler destroyed about 40 tonnes of counterfeit roller bearings, valued at around €8m. The event was staged to emphasize what a big business fake bearings have become, and to warn buyers and users of the risks that these products pose.

Destroying counterfeir bearings

The counterfeit bearings, carrying the INA, FAG and SKF brand names, were seized from a German bearing dealer following an enquiry that lasted several months. The investigation began with a tip-off and culminated with a raid on the distributor’s warehouse

"With this joint action, we want to draw attention to the fact that brand and product piracy is far from being restricted to China or southeast Europe," says Schaeffler board member, Hans-Jürgen Goslar. "Rather, it is a phenomenon that takes place right on our doorstep.

"It is no longer merely fake luxury and consumer goods that are flooding the German and European markets," he adds, "but increasingly also safety-relevant industrial products such as rolling bearings."

"The financial damage resulting from such counterfeits is difficult to quantify" admits Ingrid Bichelmeir-Böhn, Schaeffler’s anti-piracy co-ordinator. As well as lost sales and a tarnished image, the bearings manufacturers are incurring significant costs through investigating, seizing and disposing of the fake bearings.

However, they contend that it is the end-users who suffer the most. "Rolling bearings are safety-relevant components whose failure can have disastrous consequences," points out SKF board member, Claus-D. Schulz. "Inferior-quality products can not only bring about expensive downtime, but can also lead to serious accidents."

He cites the example of former Formula 1 driver Mika Häkkinen who had to retire early from the San Marino Grand Prix in 1998, when he was leading the race. The reason was found to be a counterfeit ball bearing that did not survive the stresses of the race. "Häkkinen was lucky that things didn’t turn out worse," Schulz says. "He climbed out of the car unhurt."

The German tool manufacturing trade body estimates that each year 3,500 industrial accidents are caused in Germany alone by fake products. And the German Engineering Federation VDMA calculates that the economic damage to the country’s capital goods industry amounts to €4.5bn a year.

"If it weren’t for brand and product piracy, there would be about 70,000 more jobs in Germany," declares Doris Möller of the German Business Action Group against Product and Trademark Counterfeiting.

Schaeffler and SKF concede that it is becoming increasingly difficult to differentiate the fakes from originals as the counterfeiters adopt more sophisticated production technologies. But, they argue, there are still differences in functionality and quality.

Schulz recommends that buyers should seek the advice of original manufacturer experts when they are offered products at a suspiciously low price. "They are the only people who can make a reliable judgment on whether the products are originals or fakes," he says, adding that "when buying via the Internet on eBay, it is relatively unlikely that the goods are genuine."

Other parties are joining in the campaign against counterfeiting. The bearings manufacturers NSK and Timken are investing heavily in anti-counterfeiting measures, and the distribution giant Brammer is launching a pan-European campaign to warn its customers of counterfeit MRO (maintenance, repair and operations) products.

"Not only do counterfeit bearings have serious economic impacts which damage MRO manufacturers’ ability to invest in research and development, customer support and innovation," points out Brammer CEO, Ian Fraser, "but, more importantly, they can have extremely serious consequences for the companies that purchase them.

"We feel it is as much our responsibility as our supplier partners to draw our customers attention to this serious problem and its potential repercussions," he adds. "For those who use such products either knowingly or otherwise, the risks are much greater than any short-term saving they might make. They have no redress to the product manufacturers, and have to take on board all related costs, liability and claims when the products fail.

"Using counterfeit product also means putting their employees’ – and, in some cases their customers’ – health and safety at risk, which must be entirely unacceptable," says Fraser. "We cannot emphasise enough how important it is to purchase fully branded product only through authorised distributors."

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