ARTICLE 1 of 3 (From BusinessWeek, taken from http://www



ARTICLE 1 of 3 (From BusinessWeek, taken from )

The Associated Press/DALLAS

By DAVID KOENIG

AP Business Writer

Dell customers flock to replace notebook

AUG. 15 8:03 P.M. ET Notebook computer owners began calling Dell Inc. and surfing to a special company Web site Tuesday to get replacements for lithium-ion batteries that could cause their machines to overheat and even catch fire.

The world's biggest computer maker said it began shipping replacements Tuesday for 4.1 million recalled batteries. Dell said it received more than 100,000 phone calls, 23 million Web site hits and took 77,000 orders by late in the day.

Orders were being filled on a first-come, first-served basis, said spokesman Ira Williams. He couldn't estimate how long customers might have to wait. It could vary by the model of their notebook, he said

The replacements are coming from Sony and a handful of other battery manufacturers.

The record-setting recall -- the largest electronics-related recall involving the federal Consumer Products Safety Commission -- followed reports of Dell notebooks suddenly catching fire. It is the latest misstep by Dell, including two previous battery recalls, complaints about poor customer service, and slowing sales growth, all of which has weighed heavily on Dell's once-lofty stock price.

"It's bad news on top of bad news for Dell," said Ted Schadler, a technology analyst for Forrester Research.

The batteries were supplied to Dell by Japan's Sony Corp., and Dell officials hinted that Sony would bear the cost of the recall, which analysts estimated at $200 million to $400 million -- the companies wouldn't say.

Sony acknowledged its role in the incident, but said the reports of a half dozen burning laptops were infinitesimal out of the millions of machines that Dell sells each year.

It was unclear whether Dell's problem would spread to other PC makers. Sony supplies battery cells for its own notebooks and those of other computer manufacturers.

The configuration of cells differs from one manufacturer to another, but the building blocks -- the cells, which resembled small rolled up sheets of metal -- are the same, according to Sony.

Experts said the problem appeared to stem from flaws in the production of the batteries. They said during manufacturing, crimping the rolls left tiny shards of metal loose in the cells, and some of those shards caused batteries to short-circuit and overheat.

Sony spokesman Rick Clancy said shards are common in battery cells but usually just cause the battery to stop working.

"We have taken steps to address the situation ... to Dell's satisfaction," Clancy said. He declined to elaborate on what the company did to fix the problem.

Lithium has been replacing nickel-cadmium and other materials for batteries used in laptops and also digital cameras, music players, cell phones and other gadgets since the early 1990s. The smaller, lighter batteries produce more power to drive laptops with high-resolution screens and phones with advanced features.

There have been previous reports of problems with lithium-ion batteries. Last year, Apple Computer Inc. recalled batteries made by South Korea's LG Chem Ltd.

And in 2004, the Federal Aviation Administration banned shipments of lithium batteries from the cargo holds of passenger planes because of a potential fire hazard, when they're shipped in bulk. Passengers, however, are still allowed to carry laptops or cell phones on planes.

FAA spokeswoman Tammy Jones said the agency is continuing to review the possible hazard.

Roger Kay, an analyst with Endpoint Technologies Associates, said the Dell recall was not likely to lead manufacturers to avoid using lithium batteries.

"Well-made lithium-ion batteries are perfectly safe," he said. "This is a manufacturing problem and not an indictment of lithium-ion technology."

Sony provides battery components for other computer makers, including Lenovo Group Ltd., which said it gets a "handful" of reports each year of overheated batteries but does not plan a recall. Spokesman Bob Page said Lenovo's machines have other features, including software that disables the machine if it detects unsafe conditions.

Dell has been using Sony battery parts longer than other manufacturers, and Lenovo and others may eventually develop similar problems, Kay said.

Apple, which analysts say also uses Sony battery cells, said it was investigating the situation. Hewlett-Packard Co. said it does not use Sony batteries and was not affected by the recall. Fujitsu said it builds its own batteries.

The Dell recall covered batteries in some of its Latitude, Inspiron, XPS and Precision mobile workstation notebooks shipped between April 1, 2004, and July 18 of this year.

Investors brushed aside the headlines about the recall, pushing up shares of both Dell and Sony in Tuesday trading.

Dell shares rose 84 cents or 5 percent, to close at $22.08 on the Nasdaq Stock Market, and Sony shares gained 62 cents to close at $45.43 on the New York Stock Exchange.

But beyond the one-day rise in stock price, analysts warned that the reputations of Dell and Sony could suffer more lasting damage.

Cindy Shaw, an analyst with Moors & Cabot, said the recall could steer consumers away from Dell at back-to-school time. She also said business customers might not be forgiving.

At lunchtime Tuesday, a handful of customers browsed through Dell's first store, in an upscale Dallas mall. Dale Topham, a Dallas resident who was picking up a repaired computer, said the recall wouldn't make him less likely to buy another Dell.

"I don't worry because they're trying to take care of it," he said.

ARTICLE 2 of 3 (The U.S. Consumer Product Safety Commission's press release, taken from

NEWS from CPSC

U.S. Consumer Product Safety Commission

|Office of Information and Public Affairs |Washington, DC 20207 |

[pic]

|FOR IMMEDIATE RELEASE |Firm’s Recall Hotline: (866) 342-0011 |

|August 15, 2006 |CPSC Recall Hotline: (800) 638-2772 |

|Release #06-231 |CPSC Media Contact: Scott Wolfson, (301) 504-7051 |

| |Dell Media Contacts: Gretchen Miller or Ira Williams |

| |(512) 728-0308 or (512) 728-8545 |

Dell Announces Recall of Notebook Computer Batteries Due To Fire Hazard

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission, in cooperation with the firm named below, today announced a voluntary recall of the following consumer product. Consumers should stop using recalled products immediately unless otherwise instructed.

Name of Product: Dell-branded lithium-ion batteries made with cells manufactured by Sony

Units: About 2.7 million battery packs (an additional 1.4 million battery packs were sold outside the U.S.)

Battery Distributor: Dell Inc., of Round Rock, Texas

Battery Cell Manufacturer: Sony Energy Devices Corp., of Japan.

Hazard: These lithium-ion batteries can overheat, posing a fire hazard to consumers.

Incidents/Injuries: Dell has received six reports of batteries overheating, resulting in property damage to furniture and personal effects. No injuries have been reported.

Description: The recalled batteries were sold with or sold separately to be used with the following Dell notebook computers:

• Latitude™ D410, D500, D505, D510, D520, D600, D610, D620, D800, D810;

• Inspiron™ 6000, 8500, 8600, 9100, 9200, 9300, 500m, 510m, 600m, 6400, E1505, 700m, 710m, 9400, E1705;

• Dell Precision™ M20, M60, M70 and M90 mobile workstations; and

• XPS,™ XPS Gen2, XPS M170 and XPS M1710.

“Dell” and one of the following markings are printed on the batteries: “Made in Japan,” “Made in China,” or “Battery Cell Made in Japan Assembled in China.” The identification number for each battery appears on a white sticker.

Sold through: Dell’s Web site, phone and direct sales as part of a service replacement program, and catalogs from April 2004 through July 2006. The computers with these batteries sold for between $500 and $2850 and individual batteries sold for between $60 and $180.

Manufactured In: Japan and China

Remedy: Consumers should stop using these recalled batteries immediately and contact Dell to receive a replacement battery. Consumers can continue to use the notebook computers safely by turning the system off, ejecting the battery, and using the AC adapter and power cord to power the system until the replacement battery is received.

Consumer Contact: For additional information, contact Dell toll-free at (866) 342-0011 between 8 a.m. and 5 p.m. CT Monday through Friday, log on to the firm’s Web site at , or write to: Dell Inc., Attn: Battery Recall, 9701 Metric Blvd., Austin, Texas 78758.

Firm’s Media Contact:

• Dell: Gretchen Miller, (512) 728-0308, gretchen_miller@ or

• Ira Williams, (512) 728-8545, ira_williams@

• Sony: Rick Clancy, (858) 942-3020, rick.clancy@am.

.

ARTICLE 3 of 3 (From Wikipedia, taken from )

Ford Pinto Safety Problems

Through early production of the model, [the Pinto] became a focus of a major scandal when it was alleged that the car's design allowed its fuel tank to be easily damaged in the event of a rear-end collision which sometimes resulted in deadly fires and explosions. Critics argued that the vehicle's lack of a true rear bumper as well as any reinforcing structure between the rear panel and the tank, meant that in certain collisions, the tank would be thrust forward into the differential, which had a number of protruding bolts that could puncture the tank. This, and the fact that the doors could potentially jam during an accident (due to poor reinforcing) made the car a potential deathtrap.

Ford was allegedly aware of this design flaw but refused to pay what was characterized as the minimal expense of a redesign. Instead, it was argued, Ford decided it would be cheaper to pay off possible lawsuits for resulting deaths. Mother Jones magazine obtained the cost-benefit analysis Ford had used to compare the cost of an $11 repair against the cost of paying off potential law suits. The characterization of Ford's design decision as gross disregard for human lives in favor of profits led to major lawsuits, inconclusive criminal charges, and a costly recall of all affected Pintos. Ford lost several million dollars and gained a reputation for manufacturing "the barbecue that seats four."

The cynical way of calculating costs of settlements against the costs of a recall is thematized in the novel Fight Club and its movie adaption, but economists note that cost-benefit analysis is the only possible way of measuring whether safety measures are worthwhile. For example, all automobiles would be safer if they were limited to go no faster than fifteen miles per hour, but they would be far less useful or desirable in such circumstances, so that safety measure is not taken, even though thousands of lives a year are lost as a result.

The most famous Ford Pinto product liability case resulted in a judicial opinion that is a staple of remedies courses in American law schools. In Grimshaw v. Ford Motor Co., 119 Cal. App. 3d 757 (4th Dist. 1981) [1], the California Court of Appeal for the Fourth Appellate District reviewed Ford's conduct in painstaking detail, and upheld compensatory damages of $2.5 million and punitive damages of $3.5 million against Ford. It also upheld the judge's reduction of the punitive damages from the jury's original verdict of $125 million. Of the two plaintiffs, one was killed in the collision that caused her Pinto to explode, and her passenger, 13-year old Richard Grimshaw, was badly burned and scarred for life.

More recently, it has been argued (in a well-known 1991 law review paper by Gary Schwartz [2], among others) that the case against the Pinto was less clear-cut than commonly supposed. Only 27 people ever died in Pinto fires. Given the Pinto's production figures (over 2 million built), this was no worse than typical for the time, and far less than the "hundreds" claimed by the consumer safety advocates whose allegations are largely responsible for the reputation of the vehicle. Schwartz argues that the car was no more fire-prone than other cars of the time, and that the supposed "smoking gun" document showing Ford's callousness actually referred to the auto industry in general rather than the Pinto specifically.

Due to the alleged engineering, safety, and reliability problems, Forbes Magazine included the Pinto on its list of the worst cars of all time. Ironically Ford had originally planned to include an inexpensive rubber bladder inside the gas tank that would have prevented most of the explosive crashes that plagued the car's run; in addition, Ford had also planned to include revolutionary dual front air bags. The addition of these two safety features would have added a few hundred dollars to the $2000 base price of the vehicle but would have probably made it a much safer vehicle. However, it is quite possible Ford would not have sold over two million of the modified car due to the substantial increase in price and may or may not have made less profit. The Pinto was once referred to as "the car nobody loved, but everybody bought".

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download