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

                            Exhibit 9
   Gillis Notes from November 1992 Taiwan Trip
                                                                   page 2
    1. Gordon: In general, factory appeared to be capable of producing
       high quality parts. CMM machines were present. Body shop
       representatives were very challenging and inquisitive. Most made
       very good points and Ting, who for the purpose of this trip served
       as both our driver and chief interpreter, was absolutely
       fantastic. He is our top inspector. Ting was responsive,
       articulate and clearly understood the concerns behind the
       questions he was asked. His demonstration of the "before" and
       "after" checking fixtures was excellent. Mark Ferrari observed
       some Pontiac fenders in a rack ready for EDP and saw problems with
       inconsistent brackets. I suggested that we pull three and put them
       on the checking fixture. They all failed miserably (brackets were
       way off) and Mark indicated that this was a common example of
       problems he had with aftermarket. The parts had not been inspected
       however a previous lot had been decertified. All agreed that this
       lot had to be decertified. There seemed to be hundreds of these
       parts in racks which indicated that they were not doing the 1st,
       each 100th and last part checks. Paul Riksen agreed that CAPA
       needs to restress this requirement and that it be done before
       painting. We need to find out the part's exact name and lot number
       and try to order it. All agreed that because so many parts were
       involved that it was likely to make it to the U.S. rather than be
       Comments from Delegation: Welding jigs would have solved the
       Pontiac LeSabre fender problem; jigs should be relocated, no
       checking fixtures present; rewelding the Pontiac bracket, would
       have been impossible, "when it goes that far..its gone"; set up QC
       program, which requires sub assemblies to be checked; beware of
       spending 80% of our time with 20% of manufacturers.
    2. Ensure: Not a very good plant and the Haur Tay parts. (doors)
       coming off the line at the time were very, very poor. I could see
       the problems. We noted as how these were not CAPA certified so
       that's a good reason to insist on CAPA. However, it supported the
       notion of the Aussies and auto body guys that aftermarket parts
       were substandard.
       Comments from Delegation: Bad doors, non-CAPA.
    3. Yung Shine: Great factory, staff and Mr. Lin were genuinely
       pleased to see us. All were impressed with the factory and our
       inspector was at the end of the line noting problems that were
       actually somewhat minor but prevented the part from getting
       stickers. All were impressed. At the end, however, I watched a
       welding operation with Mark Ferrari (near men's room) and it was
       being done on a very inconsistent basis. I asked Paul to check on
       Comments from Delegation: Better kept plant, better part; Camry
       hood checked.

   Gillis Notes from November 1992 Taiwan Trip
   page 3
    4. Summax/Haur Tay: Disaster. General condition of the plant was
       poor, at the end of a relatively long tour we saw CAPA parts
       coming back into the factory after being painted at Ensure and as
       they were being unloaded at the dock, teh lady was putting on
       stickers. I was thinking, should I suggest that we pull a few of
       these and see if they fit the checking would be a
       risk but...anyways, before I made a decision someone said, "let's
       pull a few and see if they fit...." First hood didn't fit, a
       random selection, fully painted, seal applied and boxed. Second
       hood fit within our tolerances, but exhibited gap problems and
       additional problems with ripples, etc.
       Comments from Delegation: Hood problems, hand crimping; hood
       latching assembly; no one impressed; "decertified", not using jig
    5. Three Brothers: An absolutely fantastic factory where they were
       making Honda hoods and doors, tons of robots; etc., and the parts
       looked great. They have not submitted a part yet but it was clear
       that this was an OE facility and it made our facilities look bad.
       (Note: All of the ratings that Entela gave the factories we are to
       visit was "average" they must not have even considered this as
       this place was fantastic and there was great variation between
       Haur Tay and Gordon.)
       Comments from Delegation: Fiberglass checking fixture used.
    6. Jui Li: Mainly OE with little intention of more CAPA parts. Did
       not need to see except good for all to see OE Quality.
    7. Tong Yang: Huge Factory. Many metal parts uncertified, all plastic
       uncertified, lots of plated grilles, etc. Perfect example of huge
       demand for non-CAPA. Trying to get Ford Q1 and GM status. They
       claim that once obtained they will build all parts the same. Hard
       to believe but.... Saw many certifiable parts which were not
       certified going through their warehouse form other CAPA
       manufacturers. Also saw labels on many boxes going to distributors
       in US (all non-CAPA). One was Roberts which sent Parr ballistic as
       it was one he claims got CAPA only for State Farm. Check them and
       Body Parts of America out. Stressed to Tong Yang that CAPA must
       come through. At end of meeting Ferrari and Kottschade got up and
       tried to explain the market from their perspective. It was an
       incredible breakthrough. I was so shocked I missed the
       picture--and Mark said later that he was really afraid I would
       take one!
   Gillis Notes from November 1992 Taiwan Trip
                                                                   page 4
   Comments from Delegation: OEM vs. aftermarket diff.; potential to
       really produce; good target company; heavy dependence on repair
       shop at end of line, bad.

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Created: February 4, 2000
Last Updated: May 28, 2000