Sunday, October 09, 2011

Table saws, government mandates, monopolies and crony capitalism

On October 5, the Consumer Product Safety Commission, voted unanimously to start looking at ways to reduce table saw injuries.

"Wow," you think, "that's a good thing! I mean, those terrible table saws can be pretty dangerous, even for people who are careful. Good for this non-elected agency that's looking out for our best interests!"

They are, according to this statement from the chairman, "determined to be a part of the solution to reduce the serious number of preventable table saw injuries that occur each year." (Yep - determined, whether needed or not!)

The problem is, they're not going to say they can actually reduce table saw injuries - they're just going to start looking for ways. Oh - and those ways they're looking for? It means new regulations - not new designs or innovative safety features.

No - new designs and technology and innovative features are what happens on the manufacturer's side... not the government's.

Also from the chairman's statement:

Last year, I called on the table saw industry to address this hazard through the voluntary standards process and work to prevent the needless injuries that occur each and every day. Despite my public urging for the power tool industry to make progress voluntarily on preventing these injuries, no meaningful revisions to the voluntary standard were made. Therefore, when the first opportunity arose this past June to reinitiate federal rulemaking through the CPSC’s FY 2011 Mid-Year Review vote, I joined my colleague Commissioner Robert Adler’s amendment, directing staff to prepare a briefing package with an ANPR by September 2011, to address table saw blade contact injuries. Although the Commission was urged by some to allow the voluntary standards process continue without initiating a rulemaking, the frequency and severity of the blade contact injuries associated with table saws demanded action via the ANPR.

But here's the thing that really makes a mockery of the whole 'government as savior' attitude. According to the Power Tool Institute, headquartered in Cleveland, since table saw manufacturers started using new guard systems in 2007, there have been no reported blade-contact injuries on any saw using the new guards.

So why in the world would a government agency decide now to impose new regulations? After all, isn't four years without injury a long enough time to judge the effectiveness of the new design? Wouldn't that be a rather exemplary record to be praised?

Turns out, crony capitalism may be to blame - or perhaps it might be a case of using the government for personal benefit.

You see, there is a company called SawStop, with a product by the same name. Their design will, the website claims, stop a table saw blade within five milliseconds of detecting contact with skin.

Since I don't use table saws, but most of the men in my family do or have, I asked them about this new design. They all thought it was a great idea - especially the engineers - if they could afford it.

Cost - aye, there's the rub.

SawStop sells table saws equipped with the design. This is their niche - their marketing angle - and it's a good one. And, according to some news reports, it seems to be successful as the company has sold 'tens of thousands' of their saws.

But, rather than be content that a different product is on the market that people can choose to purchase, consumer advocates are pressuring the government to mandate the inclusion of this new technology on all table saws, as this NPR article explains:

"The problem is enormous, and it's getting worse," says Sally Greenberg, who heads the National Consumers League and has been a top lawyer with Consumers Union.

The problem, she explains, is that there's a safety brake technology that can stop a table saw instantly — before it cuts off a user's fingers. It's like an airbag in a car. It's a breakthrough safety feature. But only one company in the entire industry is using it.

"We've got this great technology — it's not terribly expensive to implement," Greenberg says. "Let's do it."
Greenberg says this case is a classic example of why the Consumer Product Safety Commission was created.

"You have a pattern of injury, you have a technology that can address the injury, and it can address the injury for a reasonable cost," she says.

Given the life-altering harm these injuries cause, Greenberg says the government should mandate a safety brake like this for all table saws.

My argument would be that since the product is on the market and available, it should be a consumer's choice which table saw they want to purchase. Do they want to buy this one or that one - do they want this feature or that one - how much do they want to pay and what features are most important to meet their needs?

Strangely, that seems to be the position other manufacturers have taken in their statements during hearings on the matter:

"SawStop is currently available in the marketplace to any consumer who chooses to purchase it," says Susan Young, who represents Black & Decker, Bosch, Makita and other power tool companies.

In other words, let consumers decide. Young says many consumers won't want to pay for the SawStop technology, which could add $100 to $300 in cost, depending on which side you talk to.

A quick check online shows that table saws range in price from around $125 to $3,000, so adding $100-300 to the cost could be significant if you're only looking for the $125 model. A similar check found prices of $1,600 to $3,400 for SawStop's products. Perhaps, given a purchaser's budget and need, they'd rather not pay SawStop's cost and, instead, go with another type of guard on the blade?

Despite what appears to be success in the market, Steve Gass, the owner of SawStop and the holder of the patents on the technology, would stand a make even more profit if his product was required by the government. And it's his petition the CPSC is addressing:

Recently, Gass petitioned the Consumer Producer Safety Commission (CPSC) to require emergency brakes for all table saws. The request is being met with opposition from the industry—not only because the mandate would increase costs for manufacturers and consumers, but because Gass’s product is patented and would create a monopoly in the market.
As the sole owner of safety-brake technology, Gass would be able to charge whatever he wants for the safety-brake system—at present, Gass’s proposed cost adds about $100 in manufacturing costs for each saw, not including royalties. While this may be a negligible increase for high-end saws, it would double the price of cheaper saws. In addition to the added production costs, industry representatives say it would cost manufacturers tens of millions of dollars to re-tool to build saws with the device.

The Power Tool Institute believes the mandate will give SawStop a monopoly:

The Power Tool Institute is concerned the CPSC will mandate the use of SawStop, which, it argues, would give Mr. Gass's small saw manufacturing company, also called SawStop, a monopoly over giant power tool makers that have already rejected the technology.

"Unfortunately, for consumers, such a mandatory standard could as much as quadruple the cost of current inexpensive saws and significantly increase the cost of professional saws on the market today," the trade group said. The group plans to urge regulators not to "create a standard that enriches a private company while passing unnecessary costs on to consumers," it added.

Mandating anything too similar to SawStop could also be a problem for the industry, which could be forced to pay the SawStop company royalties on dozens of patents it has secured.

Yes, you read that correctly. Gass approached the larger manufacturers and tried to sell them his design - and they rejected it. So he went to the government in 2003 to see if he could get his design mandated - and he teamed up with the National Consumers League to do so.

And now, it appears, this non-elected government agency seems happy to oblige by creating a federally-mandated monopoly for SawStop, despite the fact that current safety features seem to be working just fine.

But this raises an even bigger question: the proper role of the government.

Some will claim that government has a responsibility to ensure that manufacturers include safety provisions and user warnings on their products. But no manufacturer wants people to hurt themselves using their products. Contrary to the belief of some, most companies understand that the negative publicity from harm to a customer is more costly than the safety provisions they could include. They also understand that customers will pay only so much for such protections - gladly paying for protections they, personally, need and want, but rejecting products with other protections that might include a higher price.

This is the beauty of the marketplace - there are products to meet all needs.

But in recent years, it appears that manufacturers are being held accountable for the stupidity of consumers (consider the lawsuit against McDonald's for hot coffee, or warning on plastic bags that tells parents not to let children play with them or put them over their heads). The Foundation for Fair Civil Justice even holds a Wacky Warning Label Contest to highlight some of the more ridiculous warnings that manufacturers now feel necessary to include.

And the stupidity of consumers is the argument being used in this case. According to several reports I read in researching this issue, Gass and his supporters have claimed that some people disable the guards on the equipment (for various reasons) so government needs to mandate even better protections - foolproof ones for people who are stupid enough to ignore or remove the ones that already come with the product.

And government, happy to inject themselves into our daily lives and save us from our own stupidity, is all too "determined to be a part of the solution."

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