Good afternoon everyone. Joe, thank you for that kind introduction. This is the third year that AHAM has invited me to address its membership, and I appreciate it. I also really appreciate the support you provided to CPSC in expressing to the Congress how important it was that we received funding for a new laboratory.

Our laboratory - which we call the National Product Testing and Evaluation Center - has been open for 15 months and it is a source of great pride among the staff and a symbol of the new and improved CPSC.

It is good to be back and to see many familiar faces at this year's conference. I am told that Wayne expanded the seminar to include members of the Consumer Electronics Association and Air Conditioning, Heating, and Refrigeration Institute.

It's good to see new faces and to see associations sharing their expertise.

I want each of you to be connected to CPSC, to know the issues on which we are working, and I want to know what issues are of importance to you.

This is why I welcome Wayne's invitation to visit with the membership of AHAM each year.

While we may not agree on every decision that the Commission or I make, we try to be transparent in our approach, and use forums like this one to share our intentions and expectations.

The Safety Academy that we hosted last month is a good example of what I'm talking about. This first-of-its-kind event at CPSC was organized by our Office of Education, Global Outreach, and Small Business Ombudsman.

I hope that some you were able to attend. The feedback we received from industry was quite positive, overall. In fact, we already have requests to do it again next year.

The panel discussions that would have been of interest to all of you involved mandatory testing, component part testing, and certificates of conformity, as well as the session on navigating the import process.

We actually have the video and slide presentations from these panels posted on our new SlideShare social media site. Please, check them out.

I know that the Safety Academy session on Section 6(b) of the CPSA raised some questions within the regulated community. I want to assure the members of AHAM and CEA of two things.

First, I have repeatedly made it clear to agency staff that we will adhere to Section 6(b).

And second, if we make a change in how we confirm product investigations - which has not happened yet - I assure you, it will be in keeping with the regulation and your rights.

While we are talking about investigations, I want to recognize how responsive many AHAM members have been to our information requests related to various kitchen appliances.

Earlier this year, we determined that the incident reports in our files and on SaferProducts.gov deserved a closer look by agency staff.

Our Compliance, Hazards Identification, and Legal staff have worked very hard to analyze the engineering reports and incident data that many of you provided to the agency.

The investigation may prove beneficial to future efforts to enhance the safety standards for various appliances.

Our work is still ongoing, but I want to express my appreciation for your cooperation.

Over the past few months, we have had a few recalls of washers, dishwashers, dehumidifiers, brewers, and coffeemakers.

Again, I have heard from staff that the affected companies worked in a constructive manner with our outstanding Compliance Officers in our Defects Division. It's great to hear that some AHAM members are reporting under the Fast Track system.

The majority of our recalls are secured through Fast Track, and it continues to be a model for government efficiency.

Marc Schoem, our Acting Director of Compliance and a 39 year veteran of the agency, is going to spend much of this afternoon talking to you about Fast Track, Section 15 reporting, reverse logistics, and other important topics.

During my remaining time with you, I would like to focus of three key areas:

• port surveillance,
• the concept of "safety by design,"
• and, an update on CPSC's key rulemaking activities.

Let's start with our import surveillance program.

There is an unprecedented level of cooperation and coordination between CPSC and U.S. Customs and Border Protection. The partnership we have with CBP is a model for how the federal government can cohesively work toward a common good.

The public is counting on CPSC. The public is depending on CPSC to be a cop on the beat at the water's edge.

They may not understand which agency at which port is seizing which products today; yet, consumers expect us to get the job done.

And we are.

We are pleased to be collocated with CBP inspectors at key ports across the country. And, we are proud to have been one of the first agencies to sign an agreement with CBP to collocate at their Commercial Targeting and Analysis Center.

By working arm-in-arm on the frontlines, we have stopped violative products such as toys, teddy bears, hair dryers, Christmas lights, extension cords, jewelry, and fireworks from ever being sold in U.S. stores.

Our collective efforts have prevented children and consumers from being exposed to products with small parts, missing shock-protection devices, undersized wiring, counterfeit UL labels, high levels of cadmium, and too much flash powder.

After facing public and Congressional concern in 2007 and 2008 for allowing lead tainted toys, defective magnetic toys, and deadly cribs from China into this country, I am happy to say that CPSC is now heading in the right direction when it comes to import safety.

As all of you know, the year of the recall did not cause a sustained decline in the importation of Chinese made consumer products. This is why our import safety efforts are so important.

There is a chart that I have taken with me - from Washington to Beijing to Shanghai - and it shows a slight decline from 2008 to 2009 of imported products under CPSC's jurisdiction from China. It goes from $273 billion of goods to $245 billion.

But, then it goes right back up in 2010 to $301 billion in Chinese imports and $320 billion in 2011.

To me, these numbers mean that we must stay vigilant at the ports. And we are.

By being proactive at the ports, CPSC and CBP staff stopped 6.5 million units of about 1,700 different children's products in 2010 and 2011.

In the first half of fiscal year 2012, we screened more than 6,600 products at ports of entry and prevented more than one million units of violative or dangerous products from reaching consumers.

We are now issuing press releases every quarter detailing our stoppages of consumer products that violate our mandatory standards. Some of you may have seen these releases.

We are providing the name of the foreign manufacturer, the importer, the violation, the quantity of units, and country of origin.

Our international office is also sharing this information with our foreign partners, so that they can help stop the problem at the source.

These releases are posted on CPSC.gov, if you are interesting in reviewing them.

I want the manufacturing sector to stay strong and I believe that having open access to information about seizures can help you make decisions to stay strong.

For importers and retailers, this information can be especially useful in managing risk and liability.

For consumers and our stakeholder community at large, we are using this information to meet our goal of creating more awareness and confidence in CPSC's surveillance and enforcement program at the ports.

We are working hard at CPSC to be proactive, while operating in an environment of limited resources.

Having information about incoming shipments allows us to be smarter with our inspection regime and achieve a higher detection rate of violative products.

In recent years, our outstanding staff at the ports has achieved a violation rate above 50 percent of samples that we have tested.

We are striving to stay above 50 percent and we are creating a new performance goal to increase the effectiveness of our targeting efforts.

Another vital part of our surveillance program is the implementation of a pilot risk assessment methodology - known as the RAM. The RAM pilot is aimed at early detection and targeting of high risk products and repeat offenders.

Preliminary results indicate that 90 percent of shipments are reviewed and released on the same day.

We have indicated in a report to Congress that we seek greater funding support in order to expand the RAM program. I'm excited about its potential and believe it will make CPSC even more effective at managing risk and managing our limited resources.

Next, I would like to discuss a concept that I have been talking about all year long. I started talking about "Safety By Design" during my travels to Hong Kong in January, and I believe this seminar is an ideal forum to continue the conversation.

I noticed that one of today's panels is focused on "designing safety into the product," with a focus on six-sigma and other successful strategies. That's great.

Even though most of you have no interactions with the toy business, I would like to use toy design as an example of a larger point.

In 2008, two researchers from western Canada published a paper analyzing about 600 toy recalls announced in the United States over a 20-year period.

The researchers found that "the number of defects attributable to design issues was much higher than those attributable to manufacturing problems."

In fact, 71 percent of the toy recalls that they analyzed were related to a design problem.

The researchers stated that "a design problem is reflected in sharp edges of a toy, which pose a laceration hazard. Another common design problem is small detachable parts, such as balls and beads, which pose a swallowing and choking hazard. Other examples of design flaws include open tubes and spaces, which can entrap children's body parts, long strings that pose a strangulation hazard, and sewn buttons and glued eyes on stuffed toys (as opposed to button-less clothing for toys and embroidered eyes)."

The researchers added: "A design problem would result in an unsafe toy irrespective of where it was manufactured. On the other hand, a manufacturing defect arises because of manufacturer errors or negligence…If a toy's design is good, it does not necessarily mean that the toys produced will be good. By contrast, if the design is poor, the toys manufactured will definitely be faulty."

With a high percentage of your major components and finished products being imported from China, the final design of your products has to be right, every time.

Before manufacturing and assembly starts, it is vital that your company design out potential health and safety risks in each and every model.

Here are some examples of what I mean.

Makers of electronic products that use coin cell batteries must ensure that children cannot access those batteries.

Coin cell batteries re-emerged last year as a public health issue, due to a rise in incidents - even fatal incidents - of children swallowing these toxic batteries.

There is international cooperation aimed at addressing this serious hazard. The World Health Organization sponsored a global health and safety conference last week in New Zealand, which we participated in, and these batteries were a hot topic.

Innovative solutions were discussed to improve battery design and to reduce, if not eliminate, the risk of burn injuries to children from ingestion.

Safety by design for the appliance and electronics industries means ensuring that all specs comply with the requisite UL or ANSI standard, and that no one in the supply chain strays from those specifications.

A breakdown in your design, in your supply chain, and in your manufacturing plan can lead to fire or electrical shock hazards, which can result in a recall.

I believe that "safety by design," can be a winning approach for each of your industries to incorporate. I believe this because it will help you reach a superior level of quality, conformance, and customer satisfaction.

If appliance and electronics makers aim for the highest level of safety in their design specifications, while CPSC and regulators in Asia keep working to promote best manufacturing practices, we can achieve something great.

The final topic that I would like to talk to you about is CPSC's safety agenda for fiscal year 2013, which started last week.

Many of the talented employees at CPSC - and there are truly many - are working on safety initiatives aimed at making our agency even more proactive in 2013.

The safety agenda I would like share with you is an agenda that advances consumer protection and maintains CPSC's position as the global leader in consumer product safety.

High on the list are a series of projects that, once completed, have the potential to save hundreds of lives and prevent thousands of injuries each year.

I'm referring to:

• Continuing to work on portable gas generators, which are involved in about 70 carbon monoxide related deaths per year. Our engineers recently put out a report about new technology that can dramatically reduce deadly CO emission rates from certain gasoline-powered generators. With the adaptation of existing technology, CO rates can be lowered to levels that would save lives. Staff predict that there would be an increase in the escape time from eight minutes to 96 minutes - that is a twelve-fold increase - for the deadly scenario when a consumer is running a generator in their garage. We have required a danger label that says, "Using a generator indoors can kill you in minutes." But, the fact that we are still seeing a high number of deaths and injuries associated with portable generators means that we need technical solutions that can save lives.
• Recreational off-highway vehicles are a popular off-road product in the United States, but they come with risks - risks compounded by the fact that these vehicles allow for passengers. There have been more than 170 deaths over the past nine years related to the use of these off-road vehicles. We started rulemaking in December 2009, and we are moving toward a proposed rule to make these vehicles safer - safer in terms of occupant protection, stability, and steering performance.
• All-terrain vehicles also remain a serious concern to the agency and to me. With more than 700 deaths per year, ATVs are the fourth most deadly product we oversee. We have been doing grassroots education and technical research for years. On Thursday and Friday, we will be hosting a two-day Safety Summit, to bring together researchers, medical professionals, the industry, and parents of children who died. I am hoping for real solutions to come out of the Summit that will improve the riding experience and save lives.
• Upholstered furniture is involved in tens of thousands of fires and hundreds of deaths each year in the United States. And, we know that 90 percent of the addressable deaths are related to smoldering fires, and the vast majority of those are caused by cigarettes. CPSC staff has proposed a rule that would limit the fire spread in upholstered furniture without the need for manufacturers to use flame retardant chemicals. This rule has the potential to be one of the top lifesaving rules in CPSC's history.
• Continuing to propose and finalize mandatory safety standards for durable juvenile products. The Consumer Product Safety Improvement Act requires that we turn the voluntary standards for these products into federal safety rules. We have already completed the rules for cribs, play yards, toddler beds, infant walkers, baby bath seats, and bed rails. We actually have a Commission vote tomorrow to finalize the mandatory standard for infant swings. The staff has proposed stronger rules for bassinets and cradles, and hand held infant carriers and strollers are in the works.

There are two fairly new rulemakings that I also want to share with you, because they address very serious risks.

• First, is table saws. Would you believe that 11 people suffer amputations every day in the United States from using power saws that cut wood? It's true. We are exploring solutions at CPSC to save people from these life-altering injuries.
• The other is gel fuels and firepots. Last December, the Commission voted unanimously to publish an advance notice of proposed rulemaking, just months after nearly all bottles of pourable gel fuel used in firepots were recalled. The ANPR was prompted by the number of serious injuries and deaths. We are aware of 65 incidents that have resulted in two deaths and at least 34 victims who were hospitalized. The victims had second- and third-degree burns of the face, chest, hands, arms or legs, after ignited gel fuel splattered on them. The ANPR is exploring the question of whether it is possible to make gel fuel safe for consumers to use.

A common attribute that runs through all of the product hazards I just discussed is that we have team leaders and technical staff at CPSC who are experts in their field.

I'm proud of the work they are doing, and I know they want to bring closure to their projects, in order to advance consumer safety in these areas.

In closing, I believe that increasing consumer confidence in the safety of the products they see at retail has been and continues to be a common pursuit for AHAM and CPSC.

Your efforts to build safety into designs, establish safeguards in the supply chain, have QA/QC measures in manufacturing, conduct reasonable testing, and comply with robust performance standards are the keys to success.

We want to continue to work with you to help you succeed. CPSC engineers will be there at the table with you, working on UL and ANSI standards. Our Compliance Officers will be there to work with you when you report product safety issues. And, staff in the Office of Education, Global Outreach, and Small Business Ombudsman will keep working to make the regulatory system not feel so daunting to you and your company.

I hope that you will take advantage of all of the touchpoints that our agency provides - from CPSC.gov to Twitter, from SaferProducts.gov to our Small Business Ombudsman.

You can also connect with CPSC through our blog, recalls widget, recalls app, and listservs.

I have a great deal of respect for the work that many of you in this room do to ensure that the products consumers use in their kitchen, laundry room, and bedroom are safe and work properly.

Let's continue to work together to advance the cause of safety - it is what the American public wants us to do.

Thank you so much for inviting me to today's luncheon, and I look forward to seeing you again soon.