If all manufacturers handled product defects the way these three companies did, builders would find protecting their reputations a whole lot easier.
By Daniel Walker Guido
Though a manufacturer may sell dozens of different products to the home building industry, if one proves defective, the entire company's survival is at risk.
Marvin Windows and Doors, Louisiana- Pacific, and DryVit each secured their existence by rapidly responding to customer complaints when problems cropped up on products they made. DryVit and Louisiana-Pacific had problems with moisture rotting their siding products; a preservative on Marvin's window and door products failed.
But, unlike some companies whose leaders merely shrugged their shoulders and did little to appease irate consumers, these three went above and beyond their warranties and guarantees to make their customers happy. By doing so, they saved untold amounts of cash that would have been spent fighting a seemingly endless series of lawsuits. Each company spent tens of millions of dollars. None would reveal the amount, saying what they spent is still part of the lawsuits against them that are being resolved in court.
A Marvin Window and Doors employee checks the width of a new wall of windows being prepared for sale.
But more important then avoiding litigation, these companies saved their most valuable asset: The good will that thrives when their corporate name is not tarnished, when the reputation of the builders who use their products are protected, and when home buyers across America are satisfied with the products in their new homes.
"If every company that gets itself into a bind because their product proves defective for whatever reason, would handle it this way, they'd all come out better, and most would survive," says Joe Garcia of Window Classics of Hollywood, Fla.
In the late 1980s, Marvin used a wood preservative produced by Pittsburgh Paint and Glass (PPG) on wood frames for its windows and doors. By the early 1990s, homeowners were complaining that the wood frames were rotting.
Marvin contacted PPG. But, according to Don Brown, an attorney representing Marvin, PPG wasn't interested in resolving the complaints. "Marvin had a decision to make. Either tell its distributors that it was sorry, but all complaints should be directed to PPG, or fix the problem itself. To protect its good name, Marvin handled the problem." PPG did not return phone calls for comment.
Brown, of the law firm of Winthrop & Weinstine in St. Paul, Minn., says Marvin knew passing the buck could prove fatal. It was better to take care of business and sue PPG for restitution. That lawsuit is still working its way through the courts.
Since there was only a one-year warranty on its products, Marvin could have simply washed its hands of most of the complaints, as nearly all came in after the warranty expired. But that would have been considered a betrayal by the end users--the homeowners--who expect the company whose name is on the product to stand behind it.
The scenarios were many and tempting. In the end, Marvin replaced the damaged products, changed wood preservatives, and extended its warranty to 10 years. By doing so, the company showed its faith in its products. "Builders began eyeing Marvin's products once again when making their purchases. It was a very smart move," Garcia says.
Commitment to quality
Louisiana-Pacific reacted much the same way when its Innerseal siding product began to fail in the late 1980s. The siding was designed to be inexpensive, lightweight, and easy to handle and install. However, it frequently rotted if it got moist before installation, says company CEO Mark Suwyn.
"As long as it was installed and maintained correctly, it was fine," Suwyn says. "But we can't control how each individual builder builds. And here, in the Pacific Northwest, it rains often, making it hard to keep everything dry at a construction site." In most other areas of the nation, the product worked fine, Suwyn says. But in Seattle and Portland, Ore., the company was becoming the target of class action lawsuits. Rather than fight the court cases, Louisiana-Pacific began replacing the affected siding.
Searching for reasons why its product failed, Louisiana-Pacific brought in Charles Bradford as business director for the renamed siding, now called SmartSystem.
A worker applies the new exterior insulating and finishing system (EIFS) DryVit created to overcome problems with an earlier product.
The company started from scratch, changing the formula that created the pressed wood siding product. "We changed the amount and the type of resins we used, added a borate based wood preservative, and changed the geometry and matrix of how we put the product together," Bradford says. "The new product had enough resin in it so it would not swell and enough preservative to ensure it didn't rot."
To amplify its belief in its new product, Louisiana-Pacific announced a 30-year warranty. In the six years since, Bradford says the company has had no new claims. "We have regained the market share we had before," he says.
Louisiana-Pacific increased testing and added additional quality control to ensure its products could handle adverse weather conditions when being installed.
DryVit says its product was never at fault. Instead, improper installation resulted in the claims against it.
"With a full job market, many contractors are not getting qualified help," says Barbara Catlow, communications director for DryVit. "There is a lot of shoddy work being done out there."
To overcome problems resulting from improper installation, DryVit created a new exterior insulating and finish systems (EIFS) product that has its own drainage system. "The new product will solve incidental moisture problems, but it cannot overcome installation mistakes, such as the lack of proper window flashing. The changes created a moisture drain that keeps the product dry." Like Marvin and Louisiana-Pacific, DryVit increased its one-year warranty to 10 years.
When faced with any kind of product or construction problem, the best thing a company can do is find the defects, acknowledge it has a problem, and do whatever it takes to make the consumer happy, says Joel Castro of Los Angeles-based Castro Associates. Castro is an attorney who specializes in product liability claims.
"The bottom line is to rapidly move to fix the problem in the manufacturing process and then address each and every complaint as quickly as you possibly can to limit the fallout from bad publicity," Castro says.
"It is incumbent on the manufacturer to get out into the field and sit down with builders and distributors and show them why the new product will not suffer the same damage as the old," says Jerry Midkiff, sales manager of the Raleigh, N.C., regional office of Carolina Holdings, a building products distributor. "Louisiana-Pacific did that, and not only that, it demonstrated its confidence in its new product by introducing new lines and new designs. The company showed the end users that it was standing behind a product it knew would not result in the same sorts of problems."