Jack Cameron, AAP, is vice president, programs and member services, Automotive Aftermarket Suppliers Association, and group executive, MEMA Brand Protection Council.
Cameron, a 24-year veteran of the automotive aftermarket, joined the AASA staff as vice president, programs and member services, in August 2007. Prior to joining AASA, he was general manager — automotive/heavy duty aftermarket, the Americas, at The Timken Co., in Canton, Ohio, a position he had held since 1999. Cameron joined the company in 1998 as sales and marketing manager – automotive aftermarket. His experience also includes Ken-Tool Manufacturing, Akron, Ohio; Dorman Products Inc., Warsaw, Ky., and Pioneer Barnes Group Inc., Meridian, Miss. He began his aftermarket career at Federal-Mogul Corp., Southfield, Mich., in 1983.
Cameron is a graduate of the University of Mississippi with a B.B.A. degree in marketing. He earned his automotive aftermarket professional (AAP) designation from the University of the Aftermarket in 1998, and completed the executive education program at Darden Graduate School, University of Virginia, in 2005.
He has been active in automotive aftermarket associations throughout his career and has held leadership positions with the Automotive Sales Council, the Automotive Warehouse Distributors Association (AWDA), the Manufacturers Advisory Council of AWDA and the joint operating committee of the University of the Aftermarket.
How prevalent is the counterfeiting problem?
Any recognizable brand is at risk of being counterfeited, from clothing and handbags, to music, pharmaceuticals and automotive parts. The counterfeiting of North American-made products — including automotive parts — has been characterized by the FBI as "The Crime of the 21st Century." The agency has reported links between counterfeit products and organized crime and terrorist organizations.
Counterfeit parts and components affect every sector of the motor vehicle industry, not just the automotive aftermarket. In the past, the heavy-duty market did not attract counterfeiters due to its narrow distribution channel and inaccessibility. However, with the increased presence of industrialization overseas, both the light- and heavy-duty markets are experiencing a spike in trademark, copyright and intellectual property rights violations.
Another factor that has accelerated the distribution of counterfeit parts is e-commerce via the World Wide Web or Internet. Online auctions and other sites that link sellers to buyers have made counterfeit parts trade an international problem of potentially epic proportions.
Any ballpark figure on what percentage of the product stream is at risk?
Numerous government agencies and industry sources estimate the total global counterfeit costs at $600 billion per year. Estimates of the cost of counterfeiting to the global automotive parts industry are $12 billion a year and growing. Some projections put the losses as high as $44.74 billion by 2011.
While the cost of counterfeiting to our industry is a concern, the overriding concern of MEMA and its members is the serious safety risk that faked auto parts pose to unsuspecting consumers and automotive service technicians.
Obviously, counterfeiting also affects our businesses: counterfeiting steals good manufacturing jobs, destroys brand reputation of legitimate companies and poses product liability claims.
What is MEMA doing to help alleviate this issue? Are there any new technologies to help prevent it?
In 2004, MEMA established its Brand Protection Council, which has a two-fold mission: first, to provide members with information, solutions and best practices to combat counterfeiting and intellectual property rights violations; and second, to raise awareness of consumers and government officials about the serious safety and economic impact of counterfeit parts.
In March 2006, President Bush signed the "Stop Counterfeiting in Manufactured Goods Act" into law, which extended federal seizure authority to include not only the infringing product, but also the tooling, equipment and supplies used to produce and traffic counterfeit goods and criminalizes production of stickers, tags boxes or other items used to traffic fake products.
MEMA supported the bill, introduced by Rep. Joe Knollenberg (R-Mich.). We were recognized for our efforts to ensure its passage with a presidential invitation to the ceremony when it was signed into law.
Thanks to this law and increased awareness of the issue, the United States is making strides in the fight against counterfeiting. A recent report shows that the U.S. Department of Justice has doubled the amount of criminal sentences that it has imposed since 2005. The Department of Homeland Security has seized approximately $200 million worth of goods in 2007, which is 27 percent more than 2006. The report also states that there has been an increase in counterfeit goods seized at borders.
What is the MEMA Brand Protection Council doing to combat the issue of counterfeit parts and IPR violations?
The Council's mission is to raise awareness of this crime and to share information on combating it. We stay in close contact with government officials and regulatory agencies — in fact, Council membership includes the U.S. Department of Homeland Security; the U.S. Immigration and Customs Enforcement/Office of Investigations; the U.S. Department of Justice, U.S. Attorney's Office, Criminal Division, Eastern District of Michigan; and the Federal Bureau of Investigation.
The Council also works closely with other associations and trade show managers to use these important industry events to disseminate information on combating counterfeiting and IPR violations. The annual Automotive Aftermarket Products Expo (AAPEX) has had a strong anti-counterfeiting program in place for a number of years. The AAPEX program includes a pre-event Webinar, which outlines ways exhibitors can report incidents during the trade show and throughout the year. AAPEX has a strict policy against display of counterfeit products.
The AAPEX policies have been so effective in preventing counterfeit and IPR violations that other international automotive trade shows have adopted the educational programs and anti-counterfeiting policies used at AAPEX.
What can individual WDs do? What should they watch out for to avoid getting caught up in such a situation?
The increased trafficking in counterfeit products has serious legal implications for aftermarket parts distributors. Liability for counterfeiting, product safety issues and recalls could fall upon distributors in certain instances. Distributors have been found liable in recent court decisions in this area.
So what is a distributor to do? While the temptation of a lower price will most assuredly always exist, the only real solution is for a distributor to weigh all the costs associated and decide.
That is why the Brand Protection Council has produced two reports on this issue: "Distributor Liability on Will-Fit, Private Label and Counterfeit Products" and "Direct Importing: Do the Rewards Outweigh the Risk?" Both of these reports are available for free download at the MEMA Web site, www.mema.org.
The bottom line is: where a part is made is not the determining factor of a product's quality — who develops and stands behind that product is. Distributors can avoid risks and liability by dealing with reputable manufacturers who provide quality aftermarket parts and products.
To follow up on the previous question, what can a WD do if it discovers it has become involved in a counterfeiting situation? What should it do first? How should it handle the issue with its customers?
The best course for a distributor is to avoid counterfeit products in the first place through these simple steps:
- Consider the source. Distributors should only buy brand name products directly from the original manufacturer or an authorized distributor.
- Money talks. As the old adage goes, if it seems too good to be true, it probably is. An extremely low cost should be a tip off to do a thorough investigation.
- Details, details, details. Distributors, retailers, jobbers and service professionals should always take a close look at the products they sell or install. Minor markings on a product can be differentiators between real and fake parts. Also, check the packaging for spelling, color variations, lettering and accurate part numbering. All may be telltale signs of counterfeit product.
A distributor or service professional who finds a part that he or she suspects is counterfeit should immediately report violations to the manufacturing supplier and/or local, state or federal enforcement agency; and coordinate intelligence efforts with your trade association and authorized supplier.
A parts manufacturer victimized by counterfeiters or intellectual property theft should contact an attorney, initiate and enforce cease and desist orders and report IP issues to local customs and border protection officials.
The main point is that state, local or federal government agencies can only investigate the offenses they know about. We all must work together to combat counterfeiting and IPR violations.
For more information or for assistance in contacting automotive brand owners, contact me at (919) 406- 8856 or e-mail [email protected], or visit the Web site, http://www.aftermarketsuppliers.org/issues/counterfeiting.php.
