“Bearings are mostly sold according to the standards and brand name catalogues, while gears are mostly custom made — even though there are several companies selling standard gears,” according to Dr. Joe Liou, senior scientist at ABB, Inc., USA, whose comments here are his own and not necessarily attributed to ABB USA.
“Bearings are more prevalent than gears and perhaps other components because there is a much larger selection of standard bearings out in the market,” says Napoleon. “Bearing catalogs are full of standard bearings types and sizes. There are hundreds and hundreds of them. But there is the same number of standard gears out there. Bearings are often considered a commodity; it’s typically easier to replicate a commodity than a specialized product. The problem is that a bearing is not a commodity. There are many technical aspects of a bearing that can and will bite you if not attended to. That’s one of the reasons why the major suppliers are so adamant about ridding the market of counterfeit.”
As for SKF’s Âström, “Bearings are not more counterfeited than other mechanical components,” she says. “All premium brands are being counterfeited. Unlike many other producers, SKF has taken a conscious decision to be open with the existence of counterfeits. SKF feels that it is our obligation to protect our customers by informing about the existence of counterfeits, the risks of using counterfeits and that the best way to safeguard authenticity is to buy from distributors authorized by SKF. We also provide free-of-charge verification support through the Authenticate app. This could possibly be perceived that bearings might be more counterfeited than other mechanical components, but that is likely not the case.”
What drives the continuing existence of counterfeit bearings? Why haven’t they been eradicated by now? Does the extreme competitiveness of the global economy compel some companies to cut corners by knowingly buying bogus bearings?
“No,” says Âström. “A bearing is a critical mechanical component in any machinery. The selection of bearing is based on the machine characteristics, e.g. temperatures, speeds and loads. There are many bearing manufacturers on the market, each listing load capacity, etc. of their products and the end user can decide which bearing manufacturer they shall buy from. (One) should instead compare counterfeit bearings with pharmaceuticals that would contain a medicine of uncertain origin or active ingredient(s) to treat an illness. In addition we do not see any price difference at end user level between counterfeit and genuine products. Less-serious distributors gain financially through knowingly buying counterfeit products and selling them to end-users with much higher margins.”
“I don’t think for a minute that legitimate OEMs are searching out counterfeit product to put into their equipment to gain competitive advantage,” says Napoleon, adding, “There is no gain for them. If they say that they use SKF or Timken bearings when they aren’t, and the product fails prematurely, they cannot go back to SKF and Timken and expect them to stand by a product they didn’t supply. If they are looking for a lower-cost bearing, then there are plenty of lower-cost suppliers out there to begin with, so there is no real benefit in my mind; it will come out in the wash anyway. Lastly, if the counterfeit supplier is actually a good bearing manufacturer and the product provides good service life, why then go knowingly down the path in an illegal means. Simply purchase the product under the real brand name and do business as it was intended to be done. I believe that in most cases there are brokers or unauthorized distributors involved in the counterfeit business, and the OEM is often not intentionally purchasing counterfeit product.
On those apparently rare occasions when injuries occurred due in part to bad bearings, who is ultimately liable? It would appear to be difficult to determine who holds the smoking gun.
Responds Liou: “Manufacturers, retailers and traders. For example, in this video — http://abc13.com/news/federal-agents-raid-bearings-warehouse-in sw-houston/192795, the warehouse is responsible for the physical harm.”
Napoleon, while stipulating that he “cannot answer this question from a legal liability standpoint,” says that “when a bearing fails, a manufacturer needs to trace that bearing back through the purchasing process to determine the plant of manufacture and the timeframe in which it was made. When they can’t track the bearing through the approved sales agents, a red flag goes up. Concurrently, engineering might start to evaluate the bearing failure and put significant time and energy into assessing the cause of the failure. All of this takes time and costs money. This is another reason why major brand name manufacturers want to crack down on counterfeit production. There is a significant cost associated with these efforts assessing product that is not their own. If it is proven that the product is not made by the brand name manufacturer and they have taken steps to protect their product integrity, then the responsibility falls back to those that sold the counterfeit product. But remember — the sellers are typically not legitimate businesses and they don’t have insurance and other means of protecting against catastrophic events. Very often the liability falls on the OEM. That is why OEMs typically have very detailed bearing qualification programs to protect themselves.
Âström states unequivocally that “It is the producer of a product that has liability. If the product is not made by SKF, SKF cannot be held liable. The end user should always contact their supplier.”
Some say that there are in fact “counterfeit” bearings out there that are as good as legitimate bearings. Which begs the question — at what point does “counterfeit” simply mean “cheaper than name brands?” Sort of like the lesser-priced, private label foods found at grocery stores everywhere — or getting an oil change at the neighborhood auto repair shop instead of at the pricey vehicle dealership.
For SKF’s Âström, “It sounds very odd! We have never seen those types of statements. We have seen it with luxury goods, but that is completely different. There are many manufacturers of bearings, and the price differs. Some bearings are even sold without brand. The customer should get what they paid for, and not a bearing with unpredictable quality “dressed up” to look like an SKF bearing. Premium manufacturers like SKF have invested heavily in their manufacturing processes to obtain a high and stable quality level.”
Police raid a facility selling counterfeit SKF bearings. Courtesy SKF.
“Yes indeed there are counterfeits that are equal to or better than the brand name,” says Napoleon. “I was involved in a case identical to this; an OEM was being forced by their customer to prove the life of the bearing they had designed into the application. They solicited help from the brand name bearing manufacturer. Upon their evaluation of the product they noticed that the ball complement of the product that had their name on it was not consistent with what their plant manufactured. It was a counterfeit bearing. The OEM called me because the counterfeit bearing was already qualified, through testing, into the application and they wanted me to evaluate the counterfeit bearing against the brand name bearing. The counterfeit bearing was equal to or better than the brand name — even though it had a different internal design. The reality of situations like this is that the manufacturer of the counterfeit bearing is actually taking the easy way out in order to make a sale. Their product was good enough to work in the application, but instead of selling themselves to the OEM on the merits of their own quality, it was easier to use illegal tactics to secure an order.”
Despite the in large part successful efforts of the majors like SKF, Timken, NSK, etc. — along with the support and assistance from trade groups like the WBA (World Bearing Association) and ABA (American Bearing Association) — in policing counterfeiters, it seems that the counterfeiters continue to survive — if not thrive. Is dealing with the ongoing production of counterfeit bearings now simply an accepted cost of doing business?
“It’s certainly a cost for doing business,” Napoleon affirms. “They don’t like doing it, but it is less costly than the engineering time to evaluate product that might not be theirs and legal fees to fight liability cases that have pulled them into a fight that could jeopardize their brand name. It’s a terrible cost to do business, but a proactive approach is typically more cost-effective than the reactive alternative of defending the brand.”
Says Âström: “Yes, it is true that SKF and some others are very actively supporting law enforcement in their efforts to go after counterfeiters. Counterfeiting of premium products has always existed, and will continue to exist as long as there is a possible market. That is why SKF is working actively to reach out to customers to make them aware of the counterfeiting situation. We see a large decrease in the amount of counterfeit in geographies where end-users have been made aware (to understand) the importance of selecting reliable suppliers and/or use the SKF Authenticate app to validate their purchases. In Europe it has decreased considerably, compared to 4–5 years ago, and in other markets we see a dramatic effect after law enforcement actions combined with media exposure.
The shipping industry (sea, air, rail, truck) is a major component of any business in the world market. While it might be unfair to consider, is there anything that shipping companies could do to help deter counterfeit bearings?
“Shipping companies should take a stronger responsibility for what they are actually carrying,” says Âström. “They should blacklist logistic companies and forwarders that have been caught transporting counterfeits. That would push back the responsibility to the forwarder to assure what they are transporting. Customs authorities also play an important role.”
Liou, on the other hand, believes it is “difficult for shipping companies to determine if their customers are shipping counterfeit bearings.”
And what of deterrents? And who is responsible for devising and enforcing them? The answer may include a bit of a surprise in that China has been very aggressive in policing counterfeiters.
“(Policing) varies between country to country, but generally not (sufficiently),” says Âström. “Chinese authorities are taking the matter very seriously and have convicted many people to long prison sentences, while in Europe, for example, the conviction rate is rather low in combination with low penalties. Generally we do not think that stiff penalties will improve the situation. As end-customers (become victims of fraud), the most effective (policy) is to make them aware of how they may best avoid counterfeiting and/or to validate their purchases free-of-charge using the SKF Authenticate app.
With all of the sophisticated tools available today, why aren’t companies’ quality control efforts having sufficient success in identifying them?
“Counterfeits are very difficult to identify and require trained experts,” Astrom says. “Especially (given the fact that) the counterfeit packaging very much resembles genuine packaging and hence the problem is not likely to be detected until a mounting occasion where (counterfeits) might result in mounting problems. However, it might not. And so the counterfeit bearing is mounted into the machinery. As already stated, end-users should select their suppliers carefully and check www.skf.com to see if a distributor is authorized.”
“Assuming that ‘companies’ are OEMs who are purchasing bearings, OEMs are not bearing specialists or bearing designers,” Napoleon points out. “They don’t know what to look for and inspect to know if a bearing is good or bad — let alone know whether it’s a counterfeit bearing or not. That’s not the area of expertise of an OEM. In large part, only the aerospace industry owns the design rights to a bearing that they use. The industrial industry typically allows the bearing manufacturer to design the correct bearing for the application, but that information is not always passed on to the OEM. That is why it is so important for an OEM to have third-party or independent inspection and testing performed while qualifying a bearing supplier. (In this way) the OEM knows what makes a bearing work in the application and can empower them so that they can perform audits of the product they are purchasing to know that it is still the same source. This auditing is both on the technical aspects of the bearing but also on the commercial side of product distribution and to ensure that no one is illegally penetrating the supply chain.”
At the end of the day it seems that counterfeiters’ expertly executed packaging rip-offs of major bearing suppliers are central to their continued existence.
“Yes — the (counterfeit) packaging has a very high degree of (resemblance) to genuine packaging,” says Âström. “This is where many counterfeiters ‘invest’ to create a superior impression, (thus avoiding) that the buyer will suspect that it is counterfeit. However, good looking packaging does not make up for the unpredictable content inside the package.”
Napoleon believes that “The greatest enticement is making money the easy way, although they put a lot of effort into making the bearing and the packaging nearly identical. But that effort is still easier than creating brand recognition. That is the fundamental issue behind any counterfeit issue. Brand recognition requires intense effort and a long time to create within a regional market — let alone a global market. SKF has been in business for over 100 years. The counterfeit producer is trying to make a quick buck without the effort and cost of 100-plus years of effort on all fronts— product development, application experience and expertise and, obviously, marketing. The counterfeit organizations are cutting that time and expense out of their business model, so any cost associated with creating an identical product — right down to the packaging — is worth the effort and results in a payoff at the expense of the brand name manufacturer who has worked for a century at creating brand awareness.
Napoleon Engineering Services
1601 Johnson St.
Olean, NY 14760
Phone: (716) 372-6532
www.nesbearings.com
SKF
415 50 Gothenburg
+46 31 337 10 00
www.skf.com
