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Lenovo announces recall… September 29, 2006

Posted by fukumimi in Economy & Business, IT, Japan.
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Well, it is being reported that Lenovo has announced a recall of 526,000 laptops which use Sony Li-ion batteries which were at the center of the recalls affecting Dell and Apple. Just a month ago, Lenovo appeared pretty confident that the problem would not affect them.

Several other manufacturers also distanced themselves from the Dell/Apple recalls, but with Sony announcing that they will be recalling all batteries of the same type, it appears these manufacturers will also be affected. They had stated that they were unaffected because whilst they used the same Li-ion cells, the design and peripheral electronics (used for battery management and charging, for example) were different from the Dell/Apple batteries and this meant that their batteries were safe and unaffected.

I had thought at the time that that was a rather bold stance to take, and it certainly appears those manufacturers who made a point of stating that their machines were unaffected will have to retract their earlier statements. The big question for me is whether the markets will punish companies who jumped the gun with their safety announcements, as I feel they should. My belief is that such behaviour is not an one-off event, but indicative of a broader corporate philosophy which seeks to hide or downplay negative news at the expense of procedural compliance, honesty and potential issues of consumer safety. I don’t think it is sufficient to make the excuse that they didn’t “think” it was a problem, when the issue was still under investigation. Either these companies jumped the gun, or Sony gave them bad intel and should be held accountable. Either way, some heads should roll. (Of course, that is unlikely to happen in any Japanese PC maker)

Woes continue for Sony….. 6.42 million units recalled and counting. The number will rise as other manufacturers announce recalls. How much will the recalls cost Sony? Seems certain that the bill will be upwards of $0.5billion in recall costs, and there will likely be an impact of the negative coverage on future sales as well.

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