SKF, INA/FAG Partner to Tackle Counterfeit Bearings

SKF, INA/FAG Partner to Tackle Counterfeit Bearings SKF AB (Sweden) and Schaeffler Group (Germany, parent of INA and FAG bearings) are working together to tackle increasing European distribution of counterfeit bearings. The companies issued a joint press release reporting they had been operating over several months to search out, identify, investigate, and initiate criminal action against a major counterfeit bearing distributor in the Franconian area. Approximately 40 tons of counterfeit bearings were seized by authorities, with a market value exceeding Eur 8 million (USD $10.7 million). All carried SKF, FAG, or INA brand markings. They were eventually transported to FAG and destroyed at its Schweinfurt location. Hans-Jurgen Goslar, a Schaeffler board member, announced: "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. Rather, it is a phenomenon that takes place right on our doorstep. So it is no longer merely fake luxury and consumer goods that are flooding the German and European markets but increasingly also safety-relevant industrial products such as rolling bearings. That's why on this subject, we maintain intensive cooperation across company and competitor boundaries." Schaeffler Group's anti-piracy coordinator, Ingrid Bichelmeir-Bohn, said: "The financial damage resulting from such counterfeits is difficult to quantify, even for our companies alone." She went on to point out that counterfeits not only cause lost sales and tarnish a company's image, they also bring "enormous" costs for investigating, seizing, and properly disposing of the counterfeit bearings. Disposal, for example, requires heightened security measures to ensure full destruction of the seized bearings. SKF and INA/FAG also sought to remind customers that counterfeiting damages end users the most. These are the companies designing, using, and installing bearings into everything from wind turbines to railcars to machine tools. The costs in lost revenue, reputation and safety can be enormous. For a simple example, in 1998 a counterfeit bearing found its way into the gearbox of Mika Hakkinen's F1 race car for the Grand Prix of San Marino. It failed after only 17 laps, forcing him to retire his McLaren-Mercedes while leading, and handing the win to David Coulthard. The Association of the German Tool Manufacturing Industry estimates 3,500 industrial accidents in Germany each year are due to counterfeit component failures. The German Engineering Federation estimates the economic damage is Eur 4.5 billion ($6 billion) every year. Doris Moller, Acting Board Member of the German Business Action Group against Product and Trademark Counterfeiting, argued, "If it weren't for brand and product piracy, there would be about 70,000 more jobs in Germany." Because counterfeit bearings are visually almost identical to the real thing, customers may not be able to differentiate the fakes before it is too late. The companies took that point and expanded it to warn against buying from anything but 100-percent reliable sources -- that is, from manufacturers and authorized distributors and not via the gray market or from unauthorized channels. eBay, in particular, was singled out with the same venom it is by luxury goods manufacturers: "When buying via the Internet on eBay, however, it is relatively unlikely that the goods are genuine. Often the components there should rather be exhibited in a museum." The companies concluded their announcement by warning they will continue to pursue and prosecute counterfeiters, enforcing both direct and Internet sales channels.