The BICC takes no joy from reporting on False commercial media propaganda to Counterfeit product, fake Aircraft bearings, record vehicle recalls relating to faulty bearings, Spurious bearings from major Manufacturers, epidemic numbers of Re-labeled bearings, Grey market bearings a false & scare  representation, Major Manufacturers guilty of price fixing Cartel and Public Deception awaiting EU legal proceedings to name a few.

The 2007 Bearing Year commenced with promises of global cooperation & a plan to implement mutually accepted Standards for the Code, similar to the “Electronic Industry Code of Conduct” (www.eicc.info) that boasts corporations eg. MICROSOFT, SONY, ADOBE, DELL, IBM, APPLE, KODAK, PHILIPS and SAMSUNG, after all if these giant household business names felt the need to adopt an Industry Code of Conduct then it should have been a relative easy task for the Bearing Industry to implement.

Corporate Governance & Transparency is crucial to any Industry Code of Conduct and the rewards provide companies accreditation after audit, a guaranteed increase in market acceptability & price adjustments.

Bearing Industry Code of Conduct (BICC) President, Mr Ian McPherson, said that while the bearing industry has experienced spectacular growth over the past 50 years, there is a need for it to move into the 21st century with the policies, procedures and rules in which it governs itself.

“There is a perception within the industry that the BICC is against bearing manufacturers and distributors on certain issues,” Mr McPherson said.

“Nothing is further from the truth."

“We are merely pointing out the fact the industry has undergone massive changes over the years and yet it is still operating within legal requirements that were first implemented 50 years ago.”

Mr McPherson said in those days bearing manufacturers and distributors were considered lucky if they had the latest technology, a regular supply of raw materials and there were no computers, so customer's orders were by post and telex.

“Stock was controlled by hand written stock card systems with the aid of a Slide-rule and a set of Vernier calipers,” he said.

“There was no talk of counterfeit products, Grey Market, lack of country identification, re-branding or re-labeled stock; nor were there a couple of Asian giants, China and India, competing for a stake in the global marketplace.

“It is a simple reality that warrantees, guarantees, franchisees, packaging, labeling, identification, production methods, marketing methods, catalogues, stock, storage, racking are indeed much more sophisticated and could not possibly have been foreseen by those creating these now outdated procedures, polices and legal requirements.”

The Industry also has government obligations to Occupational Requirements, Consumer and Safety standards, indiscriminate warrantee product protection, corporate transparency and governance, local national and international legal interpretation.

“However, the Bearing Industry is still making adjustments on the run without changing fundamentals needed to reform and perform as a unified Industry and keep pace with other 21st century Industries,” Mr McPherson said.

“It is almost crucial if we are to eliminate illegal activity that has been created by this change to the modern era.”

Mr McPherson said a Code of Conduct is considered the only form of modern protection against improper behavior and full accountability, auditing & transparency of product, people & corporate control.

“The Bearing Industry appears to believe that a Code of Conduct will expose some unseen danger; are frightened that violations to IP will increase; or not wanting controls or regulations to be transparent,” he said.  

Depending on the motives behind the legal argument into "Gray" trading, the basic commercial reality in marketing of Bearings will depend on what price the purchaser is prepared to pay.

In an effort to clarify some of the misinformation, BICC President, Ian McPherson, said there are a number of grounds where there is no "Material Difference" when determining a Grey or Blue or Yellow Bearing.

“Firstly, marketing forces from traders will sought the final accepted price and this will depend on the condition of any product and consideration into any "Material Difference" is always a main factor,” Mr McPherson said.

“Secondly, based on the USA Appeals Court finding in September 2005, it was concluded in "SKF vs Others", that Gray Market Bearings are not "Materially Different".

Mr McPherson said in order to fully address the issues surrounding Grey Market Bearings manufacturers must address them directly.

"If the concerns of Grey Market Bearings are real and do exist, then the original Manufacturer has a duty in the interests of the Consumer and Safety to buy back or immediately request for a full recall similar to the Automobile Industry,” Mr McPherson said.

“For Bearing Producers to simply manufacture a product & Walk away from any or all obligation only to blame others is totally outrageous.

“It will be interesting when the US Government finally releases its stockpile of unwanted estimated four million bearing pieces on the Commercial Market; will that be deemed as a ‘Counterfeit’ or ‘Lubrication’ problem?

Mr McPherson said another issue that was clouding the efforts of organisations like the BICC is a lack of background in the bearing industry for some of those offering legal advice to bearing manufacturers.

“A case in point would be to note that the lubrication process when fitting bearings, is different to that of a preservative grease,” Mr McPherson said.

“Perhaps some bearing Lawyers should do further training when entering or making advice to the Industry.”

Ignored for many years because of its strict regulation, isolation from global markets and sclerotic growth, India’s arrival on the world stage was yesterday recognized by the release of the Organization for Economic Co-operation and Development’s first economic survey of Asia’s other giant.

The OECD credits New Delhi’s reforms – which began a decade after China took the reform path – with raising gross domestic product growth fourfold, to a rate “that will double average income in a decade”. This growth “has helped reduce poverty, which has begun to fall in absolute terms”

With Major BEARING Manufacturer’s (EU/USA/JAPAN) now increasing production facilities riding on the back of India’s booming economy, India’s domestic BEARING manufacturers have re-invested its own infrastructure by equipping their factories with the world’s latest IT & Machinery operations. India's rising bearing producer “Sun Bearings” division of the Galaxy Group, are now planning to increase its output with emphases on premium quality for export into other OECD countries.

The ACBG Bearing group consists of engineers & professionals from both inside & outside the Bearing Industry representing Bearing Manufacturers, Key Bearing Application OEM’s & designers, Government regulators and representatives from International Standards Organization. Possibly the most complete group of bearing “brains” ever assembled at any one congress in the world. 

A news media release 24 August 2007 stated “Counterfeiting activities are the highest in passenger vehicles, with 45% of after-sales market captured by Counterfeiters”.

The industry lobby group Confederation of Indian Industry (CII) claim the proportion of Fakes seven years ago was 12% rising to a staggering 47% currently. And the bigger the brand the stronger the counterfeiting as profitability is far larger according to Daimler Chrysler, claiming use of counterfeit bearings and other critical components can cause accidents and prove fatal.

However, these Industry experts concluded that Governments should come to the rescue by providing financial assistance and a pathway to resolve these malpractices, WRONG.

Over several years, leading bearing manufacturers in EU & USA have received little joy in hiring big salaried lobbyists to twist government arms for relief. Further direct representations from bearing companies CEO’s have fallen on Politician’s deaf ears – There is little more Governments can assist as existing legislation is already in place apart from getting involved into the Commercial mire that is outside the boundary of the peoples Parliament or statuary authority.

By refusing to state the Country of Origin allows easy access for global Counterfeiters to manipulate the origin & mark bearings any desired “Country”.

This procedure also sets a precedent for EU brands produced in China to follow suit and ignore the consumer by not marking there bearings “Made in China” or “China”.  Some leading EU brands simply mark bearings with a code eg. “A30” for there own recognition this product is of Chinese origin, leaving the uninformed end user they are buying EU production. 

There now appears sophisticated ways involving turning a complex Counterfeit problem into a complex, but misleading & fake advertising campaign.

Many news reports from China state the capture of bearing distributors selling small lots of Counterfeit branded bearings. Although comments like “Officials from China Bureau of Industry & Commence”, “Experts carry out immediate raids”, “The distributor confessed”, ”393 sets of counterfeit bearings impounded” are typical media releases, but says nothing about the name of the distributor, nothing about prosecution, nothing on Intellectual Property legal proceedings and nothing about police intervention – after all it’s a crime !

However, you are left with the impression that Counterfeiting is under control with the editorial comments on how wonderful is a certain bearing brand. 

According to Business Software Alliance figures released in May, 29 per cent of software installed on PCs in Australia in 2006 was obtained illegally, amounting to $US622 million in losses to the industry.
But the piracy rate of 29 per cent was lower than the 2005 rate, which was 31 per cent. Globally, software companies claim they lose $US40 billion a year to piracy. But in addition to costing Microsoft money, Hutley warned that pirated versions of Windows also often contained "incomplete code" and malware. The pirated Microsoft software found in the Chinese raids, conducted by the FBI and China's Public Security Bureau, included copies of Windows Vista, Microsoft Office 2007 and older versions of both products. In a statement the FBI said it confiscated discs with an estimated retail value of $US500 million. Chinese police arrested 25 people and seized property worth about $US8 million. "This case should serve as a wake-up call to counterfeiters," said Microsoft's senior vice president and general counsel, Brad Smith. "Customers around the world are turning you in, governments and law enforcement have had enough, and private companies will act decisively to protect intellectual property."

The Professor at the Hong Kong University of Science and Technology, Mr. David Zweig said “This is a harsh but probably necessary strategy to re-establish control over an under-regulated sector”. Many experts say the Regulators were overwhelmed by a fast growing industry where Entrepreneurs were eager to make blockbuster profits – quickly.

Ball & Roller Bearings are no exception having little or no controls and totally Unregulated, placing the Industry in a high risk area vulnerable to counterfeiters and corruption.

Accordingly, it is recommended 3 simple methods to avoid where possible Corrupt or Fake Bearings

- Do not accept or install Bearings having little or no identification.
- Do not accept or install Bearings without Country of Origin & Brand stamped on Rings.
- Do not accept bearings without the above proper labeling on packaging.

And if the customer is vulnerable, some bearing experts claim Counterfeit Bearings can benefit business. 

Although English Dictionaries can state various examples to best describe spurious, the simple & more direct definition states “Lacking Authenticity or Validity”

Spurious bearings are more readily found & produced in China & exported globally to unscrupulous bearing traders, creating wide spread concern for legitimate Manufacturers e.g. SKF, Timken & Schaeffler group.

However, there is another serious concern when legitimate bearings manufactured in China without a “Country of Origin” are exported & sold on western markets. In other words, “Lacking Authenticity or Validity”

The BICC requires a fair and level “playing field”.

Small steel balls are a terrorist’s popular choice, because when packed with explosives they will produce a deadly reaction upon detonation.

Unfortunately, low grade balls can be manufactured without the skills & machinery of first grade premium quality balls although some sophistication & expensive technical equipment is still required.

Furthermore & as a reminder, if you’re bearing company/organization is a member or stakeholder of BICC then you are entitled for voting rights to recommend any new proposed Standard or make changes to existing Standards.

The BICC receives persistent daily comments from Bearing Distributors stating the Code of Conduct is only for Bearing “Manufacturers” therefore does not concern them.

This is a totally wrong assumption, thwart with ambiguity.

The BICC kindly requests “Distributors” to take notice of listed “Definitions” as it firmly applies to every Bearing facet equally. In other words “Distributors” have the same rights of protection & behavior as “Manufacturers”, “Component part producers”, “Raw material providers” and “Packaging & labeling suppliers”.

Many companies in similar Industries utilizing there code of conduct, have adopted smarter methods to deal with inferior cheaper imports verses smart quality by planning for a more effective business strategy.

The Age newspaper www.theage.com.au has released a Private Business news report 18 May 2007, regarding “Local manufacturer knows how to handle the import threat from China” in part reads:      

“Here or DAIR, car-parts supplier’s got it made.

TOYOTA chief Katsuaki Watanabe burst into laughter when David Fraser told him the derivation of his company, DAIR Industries……..Mr. Fraser said. “He thought it was a huge joke”.

It’s not unusual for Mr. Fraser to be talking to automotive executives. In this case, he was at a Global automotive supplier’s convention in Tokyo.

Mr. Fraser’s company based in Melbourne South, Australia is a leading parts supplier – parking brakes, pedals, car jacks, hinges & strikers, to name a few – to GM, Toyota & Ford, and his order book is full.

Mr. Fraser’s company DAIR, has an interesting twist : it’s a case of reversing Globalization. DAIR made the investment by sending staff to Germany & Czech Republic for training and improved there image  by moving to a spick-and-span building, visitors remarks “it’s the cleanest factory they have ever seen”

DAIR’s comments : Image can’t replace performance, but image coupled with good performance can be a differentiation.

Furthermore, as the car-parts industry is tough Mr. Fraser said many in the components industry had a weakness - They do not know a different business model.

Although of 42 annual reports of the top 50 companies revealed a sharp increase in the number of mentions of corporate responsibility, not one BEARING company in the top 500 had this recognition. A rather sorry state for the Bearing Industry, hopefully an improvement is imminent.

According to the study, corporate responsibility was second only to growth as a key focus. The Mckinsey review found 80 % of bosses had mentioned corporate responsibility in 2005, up sharply from 66 % in 2000.

Furthermore 38 % mentioned “community” in 2000, five years later the number had risen to 52 %. In the same period, mentions of “environment” had gone from 21 % to 30 %, “risk management” from 13 % to 23 % and mentions of “regulation” had reached 38 % up from only 18 %

The biggest increase was the mention of “corporate governance” up from 9 % to 43 % and rising with a Code of Conduct. McKinsey director Mr. Tom Saar told BICC he expected this trend to continue.

This Code of Conduct is hailed by most in the organic produce sector as an important step to protect consumers from rogue operators taking advantage of a loophole to “pass off” ordinary produce as higher-priced organic goods.

Organic Federation chief Mr. Andre Leu said the move to federal regulation with a mandatory Code of Conduct was long overdue for the sector, which has an estimated valued of mega $millions per year.

Revelations of a wide-spread racket in which primary producers were substituting cage eggs for free range and reports of so-called organic chickens sold locally that failed to meet the export standard. “For us that’s been a massive concern. We need to have integrity in organic products so consumers could be confident that most products claiming to be organic were legitimate” stated Mr. Leu.

This Code of Conduct “Standard” will be a single standard, marked by one logo, which could be administered by Certifiers, and a ban on the use of the word organic for uncertified goods.

On 14th March 2007, the BICC advised that the World Trade Organization, Geneva Switzerland stated that “Standards set by private sector bodies can boost trade”. The BICC concluded that to be awarded Accreditation, these members would have a distinct trading advantage by offering “Users” the assurances that there Code of Conduct certification containing an Audit facility is maintained.

To have BICC operations in USA & EU would enable a far greater global access.

The BICC welcomes constructive comments to this proposal & if your company would like to make further suggestions please email ian@bearingcode.com .  

Over recent years, there has been a perception that the freight-forwarder who declares documentation complete with the Country of Manufacturer/Origin is a protective shield against any misrepresentation from the “Distributor”.

Distributors who import/exports bearings are very entrepreneurial maintaining skillful systems needed in today’s challenging competitive conditions. The concerns about temptations to circumvent regulations are real & in some occasions can be seen by some as justified, albeit unlawful. The US has paid a huge price in Intellectual Property violation especially from goods imported under improper documentation or declaration, the same can be said of Germany & other EU Countries.  

Ball & Roller bearings, whole computer systems, designer clothes, food, the latest kiddies’ crazes, all these and more have been ripped off without a penny paid to owners.

From the latest news within the Asian giant, China has finally acknowledged the right to foreign traders’ Intellectual Property & to consign the theft of IP to the past.

The BICC is not sure that these statements are just empty rhetoric, as compliance from governments doesn’t signal that compliance from the factory floor will eventuate although this time around China has set in place laws for IP protection.

The Director of International policy for IP, Ms. Caroline McCarthy says there’s still work to be done to persuade some manufacturers and advisers to fully appreciate the value of Intellectual Property. “It’s crucial that businesses do proper due diligence and develop a comprehensive intellectual property strategy before trading with the Chinese market”, she said.

It appears a language complication has made “Bloggers” anxious as laws in USA written in English are different to other countries creating a unified acceptance from one blog to another blog difficult. It’s like having 4 or 5 numbers for a 6203ZZ ball bearing!

If your sense of humor is aroused & need more then blog on: www.radar.oreilly.com/achives/2007/04/code_of_conduct.html

The World Net Ballers’ Association consisting of mainly Female gender has agreed to adopt a new form of Code of Conduct that deals with behavior both prior to the game & especially after the conclusion. 

The graph below indicates the tremendous growth in the amount of Bearing Exhibitors from CHINA with a staggering 129 companies from the Asian giant representing approx 50% of the total. Any bearing business can purchase Chinese Bearings & for as little per order lots of $10,000, you can have your own tailored made stampings on the rings complete with glossy packaging !

Obviously this has been highlighted to the BICC by several disgruntled bearing manufacturers & distributors, it is our intention to investigate every claim.

The Lawyers’ survey results were centered on Companies own private business Codes rather than Industry Standard Codes, although the parallels have similar conclusions. Obviously more people & companies are thinking about Codes & Governance however, apathy is a serious concern that should not be compromised with a “blind fold” allowing events of The Parmalat scandal of 2004, in which its founder Calisto Tanzi secretly siphoned up to 500 million euros from the Italian company to a family owned subsidiary, is an example of what could happen if risks involving Codes of Conduct are ignored.

Furthermore, the results find a disturbing trend for Company Directors investing money into other business priorities instead of tackling compliance and ethic issues.

The BICC has many functions, in particular to give recognition to all Members the right to display the Accreditation Certificate & File Number to their clients as evidence of a registered listed company according to there Industry Code of Conduct.

Nearly all application users of Ball & Roller Bearings will be well aware of other Codes of Conduct, and corporate management should be familiar to procure product from only those suppliers who belong to a Code giving assurances that proper audit procedures have been achieved.

Having obtained membership of BICC, your company will have a distinct advantage from those companies who are not members, thereby creating a trading advantage. The World Trade Organization, Geneva Switzerland stated recently that “Standards set by private sector bodies can boost trade”. The BICC can provide these Standards at the same time issuing strong awareness to the global community, be cautious of bearing companies that are not a member of there Industry Code.

The BICC notes that the WTO findings are similar when applied to our Code of Conduct, especially in definition for setting Standards as “By-Laws” to the Industry when Accreditation is requested.

Transparency International (TI) campaigns against all forms of Corruption, Fraud, Counterfeiting & Bribery and has more than 90 offices worldwide “www.transparency.org” - TI’s global network of chapters and contacts also use advocacy campaigns to lobby governments to implement anti-corruption reforms and assist where possible, in formulating various “Codes of Conduct” with Standards.

The FAA’s suspected unapproved parts program office alleges Hill Aviation counterfeited and then sold an unknown number of the tail rotor hanger bearings.

The discovery of counterfeit bearings in Franconia was preceded by several months of wide-spread enquiries. The investigation resulted from a tip-off that prompted the companies to take joint action. As soon as sufficient suspicious factors came to light, they informed the public prosecutors and eventually the criminal investigation division raided the distributor’s warehouse.

“The financial damage resulting from such counterfeits is difficult to quantify, even for our companies alone,” says Ingrid Bichelmeir-Böhn, jurist and anti-piracy coordinator for the Schaeffler Group. In addition to lost sales and significant loss of image through inferior-quality goods that may affect future business, there have been enormous costs arising from the investigation, seizure and professional disposal of the bearings. The disposal requires tight security, for only the full destruction of the counterfeits will eliminate the danger for the consumer once and for all.

However, the damage affects not only companies producing brand-name goods and investing heavily in research, development and quality assurance. It also affects those companies that install these components. But it is the end customers who suffer the most. Rolling bearings are incorporated in virtually everything that rotates – from machine tools, wind turbines, inline skates and X-ray apparatus all the way through to road and rail-bound vehicles. "Rolling bearings are safety-relevant components whose failure can have disastrous consequences,” explains Claus-D. Schulz, Legal Department Director and Board Member of SKF GmbH. So inferior-quality products can not only bring about expensive downtime but can also lead to serious accidents. Just imagine what would happen if a wheel bearing broke down during hard cornering. Former F1 driver Mika Häkkinen can tell us a thing or two about this: He could not finish the San Marino Grand Prix in 1998, having to give up early-on when he was in the lead. The reason was found to be a counterfeit ball bearing that did not withstand the stress during the race. And Häkkinen was lucky that things didn’t turn out worse: He climbed out of the car unhurt. There have been other cases when fake components led to serious accidents. One example is the crash of a Norwegian airliner on its way from Oslo to Hamburg in 1989. None of the 55 passengers survived the disaster, the cause of which was tracked down to a counterfeit bolt.

The following figures indicate that the counterfeiting of industrial products considerably harms the German economy and that it destroys jobs and represents a danger to life and limb. The Association of the German Tool Manufacturing Industry estimates that an annual 3,500 industrial accidents in Germany alone are due to fake products. According to the German Engineering Federation (VDMA), the economic damage to the capital goods industry amounts to €4.5billion – per year. “If it weren’t for brand and product piracy, there would be about 70,000 more jobs in Germany,” says Doris Möller, Acting Board Member of the German Business Action Group against Product and Trademark Counterfeiting (APM e.V.)

According to Ingrid Bichelmeir-Böhn, the fight against counterfeiters can only be successful if you persistently keep at it. The close cooperation with the relevant authorities along the distribution channels is an initial step. The Schaeffler Group and SKF involve solicitors and do not shrink from engaging detectives either. Moreover, the companies train customs officers and distributors to make it easier for them to recognize counterfeit products. 

This has become quite difficult today. Counterfeiters use modern production methods too. This makes it increasingly difficult to differentiate originals from fakes. But as far as functionality and quality are concerned, it is an entirely different matter. Unfortunately, users will notice this only when it is too late. How can buyers protect themselves against fake components? In principle this is only possible by buying bearings from a 100-percent reliable source – that is, from the manufacturer or from authorized distributors and not from the gray market. "This is also important when it comes to warranty claims,” says Schulz. Sellers and buyers of fake bearings cannot fall back on the product liability of a particular manufacturer. On the contrary, the prosecutors will take care of them. Moreover buyers should always seek the advice of original manufacturer experts when they are offered products at a conspicuously low price. They are the only people who can make a reliable judgment on whether the products are originals or fakes. When buying via the Internet on eBay, however, it is relatively unlikely that the goods