The Progress of this case will be followed from a
in chronological order with links to appropriate documents.
Top of Memorandum on the
Racketeering Nature of State Farm's Misconduct
for which this is an exhibit.
The List of Exhibits
October 8, 1990
MEMO TO: Jack Gillis
FROM: Ben C. Parr
RE: Taiwan Technical Committee Findings
We found that there was a China Productivity Center whose
responsibility is to establish export criteria for all exported
Taiwanese products for the world which includes automotive parts.
There are currently three inspectors and one manager on the DTL staff
in Taipei. The frequency of their visits varies by manufacturer.
DTL arrived 1 ½ hours late necessitating the cancellation of the
scheduled Evergreen visit. The visits were to Lio Ho and Young Shine
Lio Ho/ Young Shine
1. Lio Ho was producing the GM C10 hood (the same as the poor quality
one returned to Taiwan from CPD (Collision Parts Distributor).
Todays production run would not correctly pass their fixture. The
OEM sample fit! Specifically, six major deficiencies were noted
any one of which should warrant decertification. When specifically
asked. Wayne Tung and Don Auen (of DTL) did not indicate that they
would decertify the hood.
2. 2. Michael Ma indicated that there is a dual quality control
standard at Lio Ho: one (1) for OEM and two (2) for the
aftermarket part industry. The OEM is more stringent. He stated
that unlike the OEM there was no penalty for inferior quality from
the aftermarket part industry, i.e., no displeasure or clout
exercised to date by CAPA, or the importers. He recommended that
we somehow establish consequences for poor quality and noted that
in the past we (ABPA/ State Farm/ et al.) had stated that.
"Without quality there would be no future". However, he concluded
that today we are saying. "Without quality there is no future for
you." He was not offended and felt that it was a constructive and
positive position on the part of CAPA.
The production and quality control people in the plant work on
both the superior (OEM) and inferior (aftermarket) quality levels
simultaneously. The OEM give frequent, sometimes daily, feedback;
while the aftermarket give feedback only when they want money
back. Michael Ma stated that he had not received any comments on
the hood from DTL [Detroit Testing Laboratory] and CAPA [Certified
Automotive Parts Association] and would like daily FAX or no less
than weekly, to him and TABPA on this product. He suggested
publicizing the poor quality to the trading companies, the TABPA
[Auto Body Parts Associaiton], the APBA and say that these are
inferior parts to "buy at your own risk." Michael also stated that
Lio Ho would correct the irregularities we noted today. We should
follow up later to see when DTL checks the Lio Ho "corrections".
3. At Young Shine, Mr. Lin stated that it was his error in placing
the CAPA label on a non-certified part and he apologized. However,
the part fit the fixture very well. It warrants certification from
a fit perspective.
4. Young Shine was producing a Skyhawk fender on which DTL had a
complaint. DTL had closed the complaint by saying "Deleted Part"
(due to CAF-certification applied for). At least seven major
discrepancies, such as holes, contour gaps, edge waveness, fender
to door gap, etc., were observed on the fixture! Additionally, the
OEM part did not fit the fixture. DTL has this as a CAPA certified
part. Prior to discussion Wayne stated that it was "in spec."
However, after consultation with us he did say it should be
The Young Shine quality control leader stated that it was the
first time that they had received useful comments from CAPA. They
expressed no knowledge of the complaint. Mr. Lim asked for closer
cooperation and communication. Quoted as follows, "Did not know it
was a problem and would like direct communication with CAPA."
1. Neither plant had sufficient quality control procedures in
operation to produce consistent quality parts.
2. DTL is not fulfilling its quality control responsibilities to the
manufacturing plants orCAPA.
3. Need (mandatory) a good line of communication to be established
between DTL, CAPA, and manufacturing plants on a daily, or at
least weekly, basis regarding problems and other experiences with
their parts, whether these experiences be verified or not! They
4. The China Productivity Center should be further explored.
The second day of the visit required air transport to Tianain to visit
Tong Yang, then required motor transport three hours to visit Coin
Join Key. After these visits we then motored four hours back to
1. At Tong Yang we were successful in achieving an unannounced visit.
They received information only that morning that we were coming.
They missed us at the airport since we took a taxi. Tong Yang was
successful in delaying until they somewhat got their plans formed.
2. We saw excellent quality plastic components being manufactured for
Japanese and Taiwanese OEM. There were many different components
for many different models using the injection molding process. We
saw their paint system for their bumper covers. It was absolutely
first class and the production protocols, though somewhat labor
intensive (not surprising due to the lower labor rate) was high
quality, as was the management and quality control. Tong Yang has
a GM Service Parts Organization contract for grilles and headlamp
doors, using GM tooling.
3. Finally we were shown the sheet metal stamping facility which was
of significantly lower quality and far less organized and managed.
A new stamping line was being installed which will be as modern as
any in the world including quick die change provision and material
transfer equipment We were told that the China Productivity Center
was working with Tong Yang on this project.
4. The sheet metal checking fixtures were not used during production
at Tong Yang.
5. The Tong Yang fixtures (especially the older ones) were light
weight and of questionable value. Some of these were certified.
6. We heard from Michael Ma that Tong Yang was looking for additional
press capacity and was "farming out" their dies to other stampers
to make parts. It is unclear how DTL handles this issue even
though we know that Tong Yang has ownership of some other
factories making aftermarket parts.
7. Generally speaking, we saw examples of substandard parts at Tong
Yang, which I believe represented more of an indifferent attitude
which resulted in poor repeatability, or in consistent quality
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Uncivilization and its Discontents
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Created: February 4, 2000
Last Updated: May 28, 2000