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Association of Home Appliance Manufacturers Luncheon - Monday, May 2, 2011, Washington, D.C.

September 17, 2012

Good afternoon. Mark [Bissell, CEO of Bissell vacuum cleaners and Chairman of AHAM Board], thank you for that kind introduction and for investment that AHAM has made in advancing the cause of product safety.

In light of last night’s announcement by the President, I would like to take a moment to praise the bravery displayed by our military in their operation to find and kill Osama bin Laden. Today is a good day for our country; yet, we must never forget the victims of the attack on our country on 9-11.

It is has been a year and a half since I last spoke before the membership of AHAM. As I stated back in 2009, I respect the work that you do, and I recognize how the products that you make are integral to the lives of consumers.

Many of you in this room are on the front lines of ensuring that the products consumers use in their kitchen, laundry room, and bedroom are safe and work properly.

Wayne [Morris], I appreciated your comments before the House Energy and Commerce Subcommittee hearing in February. You acknowledged how vital it is that safety be engrained into the culture and business practices of AHAM and each member company around the world.

From design to manufacturing, that commitment to safety must be present every step of the way. This is one of the areas, I believe, where CPSC and AHAM have shared values.

I believe that my agency and the membership of AHAM also share the common goal of seeing that our commitment to safety is reflected in consumer confidence in the marketplace.

In order for consumers to have confidence that the products they see at retail are safe, they need assurance that safeguards exist throughout the supply chain.

Those safeguards are established by building safety into the design, having QA/QC measures in manufacturing, conducting reasonable testing, and complying with robust performance standards.

Now, we all have heard and seen the comments from consumers regarding their concerns about products made in China and other countries.

Certain segments of the population will continue to have concerns about foreign made products even if manufacturers follow all of the steps that I just described.

However, if there are fewer recalls of household appliances because a lab test catches a potential safety problem or a revised standard prevents a product defect, then consumers will have a positive response.

I have mentioned standards a few times, and I want to say that the work all of you do with ANSI and UL is critically important.

I believe that strong standards—whether they are voluntary or mandatory—can prevent injuries and save lives.

At CPSC, we have increased the public’s awareness about standards through the work we have done to implement the Consumer Product Safety Improvement Act (CPSIA).

Although the CPSIA focuses primarily on children’s products, I believe that if the public understands that standards exist for the majority of products sold in this country, all industries benefit.

In addition, most reputable companies who do business in this country strive to adhere to those standards.

I encourage the association and its individual members to identify standards requiring revision and challenge you all to lead the way in strengthening those standards.

CPSC technical staff wants to work with you and be part of the solution.

See, we are not working exclusively on the CPSIA, nor are we focusing exclusively on mandatory standards.

CPSC staff will continue to be at the table with you at ANSI and UL meetings because we believe that one of the best ways to be proactive and prevent injuries is through our work on standards.

During my time with you today, I would like to talk about four of my biggest priorities as Chairman of the CPSC.

Our initiatives this year aim to prevent more injuries, save more lives, and connect more businesses and consumers to CPSC. These programs include:

implementing our new, five-year Strategic Plan;

continuing to work with the Chinese government to improve their manufacturing processes;

promoting the activities of our Office of Education, Global Outreach, and Small Business Ombudsman; and

operating the database, which I know is top of mind for many of you.

Our new Strategic Plan will control our agency’s heartbeat, how fast it beats, and which muscles support it.

This plan is guiding us toward a long-term approach that I believe is best for CPSC and the industries we regulate—an approach that is more proactive and more focused on prevention.

With limited resources, being proactive might be the only path toward success for the agency. And it is the only path for CPSC to follow if we are truly to become the global leader in product safety.

I believe that CPSC is on the cusp of becoming that global leader, due to our renewed focus at home on injury prevention and our focus abroad on best manufacturing practices.

On the injury prevention front, we will use the Strategic Plan to bolster our already rigorous hazard identification effort. From the dangers associated with toxic metals to the risks of strangulation related to window cords and drawstrings in outerwear, we have a proven track record of being a global leader in hazard identification.

What our Strategic Plan also will do is help us turn hazard identification into injury prevention and life saving.

We know cadmium in children’s jewelry, as well as exposed cords on Roman shades are dangerous. Through consumer awareness and standards work, we are working on reducing children’s exposure to these risks.

Overseas, we are working proactively with global regulators, manufacturers, and suppliers to build safety into products intended for our store shelves.

One the best ways that we can deliver on the promise of our Strategic Plan is for our work plans with the Chinese government to result in real reform of the manufacturing processes.

During my visit to Shanghai in October, we, along with the European Commission, and our Chinese partner agency, AQSIQ, reached consensus on a number of key points.

We focused on the shared responsibilities of all parties in the supply and distribution chain to ensure that the consumer products they deal in are safe. We agreed to put forward a set of specific actions to implement our points of consensus.

These points may impact and benefit your manufacturing processes as we are pressing for Chinese companies to implement proven best practices that will result in safer products.

Best practices, such as:

factoring the potential for misuse into design;

putting strict controls on components and other inputs; and

conducting enough sampling and testing to ensure that all of the products coming off the manufacturing line are safe for consumers.

The long term view that the Strategic Plan takes is in line with the way we have expanded our engagement with AQSIQ. Change does not happen quickly in China; but I believe in our vision, and I believe that AQSIQ shares our commitment to effect positive change in their manufacturing sector.

I believe that our intensified engagement with AQSIQ, in partnership with the European Commission and Health Canada, will bring about real results.

If I am correct, these efforts have the potential to be among of the most significant efforts toward injury prevention that our agency has achieved.

In case you did not know, our next biannual CPSC-AQSIQ Consumer Product Safety Summit will take place in October, at the State Department’s headquarters. I hope that many of you will be able to attend.

Our work in China will be a key component of the new Office of Education, Global Outreach, and Small Business Ombudsman.

We have Neal Cohen, who is doing a great job as our full-time Small Business Ombudsman; we have Rich O’Brien, who is leading an outstanding team of international relations experts; and we have Jenny Wang and Jeff Hilsgen in our first foreign office, which I travelled to in Beijing to formally open.

The new office will continue to grow, and I want to share with you my vision for this office.

The need for the Office of Education, Global Outreach, and Small Business Ombudsman is great. The creation of this office demonstrates CPSC’s willingness to be part of the solution by providing a dedicated touchpoint for industry and foreign governments.

This office will coordinate and provide education and outreach activities to domestic and international stakeholders, including manufacturers, retailers, resellers, small businesses, foreign governments, and consumers.

We realize that many manufacturers may not know where to turn for information on our regulations or might experience difficulty accessing the information they need to fully address safety in the manufacturing process.

Neal Cohen has established a dedicated Web page for small businesses, presenting regulatory information in language that is more understandable than a Federal Register notice.

Neal is also meeting with companies and associations, listening to their concerns, and making them aware of the ways we are trying to provide relief from certain requirements.

I believe that by establishing an office dedicated to addressing the questions and concerns of the regulated community, CPSC can facilitate the transfer of knowledge across industries. This, I believe, ultimately will create safer products through better educated manufacturers.

The Office of Education, Global Outreach, and Small Business Ombudsman will focus on enhanced quality assurance in the manufacturing process in China and beyond.

During my travel overseas, I learned early on, how much foreign governments rely on the United States for help in developing their product safety systems.

I had quite a memorable trip to Hanoi within the first few weeks of taking office. The Vietnamese government could not have been more welcoming.

In fact, they would have been happy if some of our agency officials could have stayed for a few months to help companies in their country learn U.S. safety requirements.

We know that there is a small shift occurring, a shift that is leading certain manufacturing sectors to transfer some of their factories to countries like Vietnam and Bangladesh.

We must be prepared to work with these countries so that the import problems we have already experienced do not materialize again.

This new Office of Education, Global Outreach and Small Business Ombudsman will serve as a coordinated business unit to carry out this activity and allow CPSC to enhance its outreach at home and beyond to the international community.

The last initiative that I want to talk about is the one that I know is most important to your association right now—the database.

I know that the many of you continue to have concerns with the database and want the CPSIA amended to make changes to the database. I understand your concerns.

One of the reasons why I am a proponent of open government and transparency is the faith I have in the consumer. I believe in consumer rights, and I believe that an informed consumer is an empowered consumer.

Be assured that when a consumer hits the certify button on their report in the database, I want them to have made every effort to provide CPSC with complete and accurate information. It is in our best interest, the manufacturer’s best interest, and the public’s best interest for consumers to report accurately.

There are more than 600 reports that are available right now for viewing in the database. Contrary to what some are saying, the system is working as intended. Many of the reports on the database involve serious injuries to children and adults, while others shine a light on the potential for injury posed by a product.

A significant percentage of the reports we are receiving and that are going up on the database involve home appliances.

So while the association is raising objections to the database on Capitol Hill and to the press, I sure hope that individual companies have registered in the Industry Portal and are ready to respond within 10 days if they are notified about a report involving their product.

Let me debunk two other myths about the database that are out there. The first one is that the database is going to be filled with inaccurate information.

The truth is that we are making every effort to prevent this from happening.

Consumers cannot knowingly enter false information into the database. That is a federal offense and we will refer cases like that to the Department of Justice.

We are taking material inaccuracy claims seriously, and we are handling them in a cautious and conservative manner.

The majority of material inaccuracy claims simply involve a company telling us that the consumer identified the wrong manufacturer.

We can handle those claims. CPSC staff is working to track down and notify the proper company, so that they are afforded a 10-day period to review the report, provide a comment, or make a material inaccuracy claim.

We want to get it right, and we are getting it right.

Companies that are signed up in the Industry Portal are responding within the 10-day window, and many are providing comments. I want to mention that one of the manufacturer comments on the database involved the company informing the consumer that their major appliance had been recalled.

The database can be used as a tool to educate consumers.

Currently, there are 2,500 companies signed up on the Industry Portal. I would like to see every AHAM member registered.

The second myth about the database concerns who is submitting reports on The answer is: consumers.

As we anticipated, the majority of reports are being filed by consumers or relatives of the victim who experienced an incident. We knew this would be the case.

I can also share with you that more than 80 percent of submitters with eligible reports have authorized the manufacturer to contact them.

The pledge you have from me is that we will continue to do everything we can to address material inaccuracy claims before reports are posted, and we will educate consumers that their reports should be accurate and safety-based.

Most of the consumer reports we receive qualify to be posted on the database. Moreover, the majority of those reports include the model or serial number of the product provided by the submitter.

Not everything about the database will be perfect every time— but let’s not make the perfect be the enemy of the good.

The vision I have for is that it is a site that generates more reporting to the agency, and that as a direct result of our IT modernization overhaul, we are able to manage these reports with greater efficiency.

I also envision the site empowering consumers to make independent decisions to further their own safety and the safety of their family members.

For example, if a mom uses the search function on the site, sees a series of reports of harm about a product that she bought for her child, and decides to take the product away from her child—while we are working behind the scenes to finalize a recall—in my opinion, that is a good thing.

We do not want the database to create unnecessary problems for your business. I mean that.

That is why we have worked so hard to follow the law and put procedures in place that allow us to work with manufacturers to address claims of material inaccuracy and confidential information.

We have put a good team together to implement the database, and there is no plan to “hit the pause button” on it.

I hope many of you watched or listened to the House oversight hearing in February during which Wayne and I testified. I shared with the subcommittee that although I was not willing to make last minute changes to the database, I was willing to work with Congress on other changes to the CPSIA that would give us greater flexibility.

My position on the CPSIA is, “Amend it, but don’t end it.”

The Act has really made CPSC a stronger agency; we have more staff and greater authorities; we have more influence over improving safety standards; and we are better able to be proactive abroad, at the ports, and in the marketplace.

Last year, I was open to making certain changes to improve the Act that would give us greater flexibility. Certainly, I remain open to working with Congress and stakeholders to make certain changes to the CPSIA.

I would like to close today by saying that I am proud of the direction we are heading at the agency. We are trying very hard to demonstrate that we can be more agile and more capable of stepping in front of emerging hazards. These are essential elements of our Strategic Plan.

I believe we have the right team in place—a team willing to work in partnership with those committed to advancing product safety and a team willing to take action against those who do not believe in following the law.

Our small yet dedicated staff is working to forge a new regulatory approach—an approach built on establishing predictability and consumer confidence, and we are determined to make it last.

Being proactive and collaborative are the keys to our regulatory approach.

If we can be partners in this effort, I know that we can build upon the progress that we have made in recent years.

This is progress that will help us reduce violative products in the marketplace.

It is progress that will help us reduce injuries.

And, it is progress that will connect more businesses and consumers with CPSC.

In case you have not heard this before, we are trying to make 2011, “The Year to Get Connected with CPSC.”

From Twitter to Facebook, from to our Small Business Ombudsman, we are expanding the touchpoints that businesses have with the agency.

I hope that each of your companies will connect with CPSC through our blog, widget, phone app, listserv, and websites. I hope that you will use your websites and social media platforms to follow us and link to our materials.

Even if we come out with new safety tips for a product that your company isn’t involved with, if you believe CPSC’s advice could help keep your customers safe, all I’m asking is that you consider posting a link on your Facebook page or your e-newsletter.

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

Thank you once again for inviting me to today’s luncheon, and I look forward to seeing you again soon.

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