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Maytag needs to ponder slow recalls

By: Hari Bapuji

Posted: 05/4/2009 3:06 PM | Comments: 0

Recalls have become an all-too-common experience for consumers.
The latest recall of Maytag refrigerators adds to the growing list. The recall involves 1.6 million refrigerators sold by Maytag, 193,500 of them in Canada.
To put it in perspective, one in every 60 Canadian households is affected.
As large-scale recalls continue to take place, a number of questions remains unanswered.
First, why does it often take a company years to identify a problem with its products? The refrigerators being recalled were sold between January 2001 and January 2004.
Second, why do firms wait for dozens of incidents to occur before they initiate corrective action? Maytag received 41 reports of refrigerator relay ignition, including 16 reports of property damage, before recalling the fridges.
The last time Maytag announced a recall of 2.3 million of its dishwashers (made by Samsung), Maytag set up a thorough website offering detailed information about the recall in the form of 25 questions and answers. This format answered all my questions. For the current Maytag recall, the number of Q&As available online is only seven questions. The seven questions and answers are also superficial. The following is an example:
Q: "Why didn’t Maytag test these refrigerators before marketing them?"
A: "The safety of Maytag Corporation customers is our top priority. Therefore, we conduct extensive product testing during all phases of development. If a safety issue is identified, we move swiftly to find affected units and resolve the issue."
Other than pointing to the possibility of a fire hazard due to an electrical failure in the relay, the website avoids describing what the problem actually is and does not tell how the company is going to fix the problem. This lack of information prompted me to dig into refrigerator recalls and to Maytag recalls in general.
The first thing the research uncovered is that this latest recall is the largest refrigerator recall in history. Second, this recall is also the slowest in history.
Often, questions are raised about whether outsourcing and offshoring result in poor quality goods, difficulties in fixing responsibility, and thus larger and slower recalls. Products made by Maytag in its own factories appear to take longer to recall — nearly 49 months after they are first made and sold. Maytag products made by others, on the other hand, are recalled by Maytag only about 18 months after they are first made and sold.
Further, Maytag products made by Maytag are recalled after an average of 63 incidents, whereas a Maytag product made by others was recalled after just an average of 10 incidents.
Maytag officials should ponder over some of the troubling questions about the increasing slowness of recalls and possibly do more to set up systems to prevent them.

Prof. Hari Bapuji is an assistant professor in the Department of Business Administration in the Asper School of Business at the University of Manitoba. His teaching and research include strategic management and international business.
The Learning Curve is an occasional column written by local academics who are experts in their fields. It is open to any educator from Winnipeg’s post-secondary institutions. Send 600-word submissions and a mini bio to thelearningcurve@freepress.mb.ca.

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