Counterfeit and Pirated Auto Parts: $1 Billion Loss for Ford?

Ford officials have been extremely vocal against counterfeit and pirated auto parts and they have every right to do so. It seems that fake auto parts is depriving the company $1 billion. It is a very bad news to digest. The worst part is that the trade of counterfeit auto parts is increasing at a very rapid face. If this trend continues then sooner or later, fake products will outnumber the real auto parts from real companies.

CBC News reported:

Ford has dispatched undercover investigators to seek out counterfeit and pirated auto parts, a problem that is putting the public's safety at risk and costing about $1 billion US annually, according to the automaker.

"[The cost] doesn't include the health and safety ramifications of fake or faulty items such as auto glass, brakes, tires, suspension and coupling mechanisms, and even seatbelts. Driver safety is simply not quantifiable," Joe Wiegand, Ford's global brand protection manager, says in a study released by the U.S. Chamber of Commerce and the Coalition Against Counterfeiting and Piracy.

Wiegand says a full-time staff has been hired to track fake auto parts within the U.S. The company has also hired independent agencies to investigate outside the country.

Yes, the loss of Ford is too much and this should stop. However, Ford is not the only company suffering from this problem. GM is suffering too.

The Detroit News reported:

General Motors Corp. dedicates significant resources to the problem around the world, but hasn't put a dollar amount on it.

"The counterfeiters are criminals. They don't file financial reports with us," spokesman Tom Henderson said Friday. "It's kind of hard to get an accurate number on this. We know it's significant."

GM has seized more than $250 million in counterfeit auto parts in the past two decades, shutting down hundreds of counterfeiting operations.

Piracy is a major issue in international business. It will take time and determined effort from many governments to put an end to piracy. On the other hand, major companies like Ford and GM should come up with initiatives to make people conscious about health and safety hazards of using counterfeit auto parts.