Product recalls result from faults found in the products that actually affect the consumers. The recalls become imminent when the products actually results in the loss of life and property. However, often the products are not recalled for the immediate danger but the long term effects that they may have or simply for the reason that they are unfit for use. Here is a list of the 10 most costly recalls ever. Have you ever used any of these? Have a look.
Vioxx by Merck
Vioxx was introduced by Merck as a drug for arthritis. Studies found that patients who were taking Vioxx for at least eighteen months ran the risk of having heart attacks and strokes. So Merck voluntarily recalled the drug from the market in 2004. The company lost $725 million in sales and another $4.85 billion in settlements arising from over 27,000 lawsuits.
Ford Tires by Firestone/Bridgestone
In 2000, Firestone/Bridgestone recalled more than 6.5 million of its tires for Ford Explorer and Mercury Mountaineers when it was found that over 200 deaths and more than 3000 major injuries were caused by the faulty tires. Investigations showed that this resulted from negligence on parts of both Ford and Firestone. It cost $440 million to Firestone/Bridgestone and $3 billion to Ford for recall; and another $600 million to Ford for settling lawsuits.
Between 2009 and 2011, Toyota Motor Corporation had to recall more than 5 million vehicles due to faulty floor mat placing which resulted in trapping the acceleration pedal. This caused unintended acceleration and led to several crashes. Later on the company had to recall another 3 million vehicles. This resulted in losses running over $ 2 billion and had a huge impact on the company which was just recovering from effects of recession. Over and above it had to settle claims of over a billion dollars as a result of lawsuits filed by the previous car owners.
Salmonella infection triggered one of the costliest food material recalls ever where the amount involved ran into a billion dollars. In 2009 Peanut Corporation of America recalled all its shipments of peanut butter to the places where it supplied. It included the major food product manufacturers who were the largest users of peanut butter. As a result of such huge recall, the company had to file for bankruptcy protection.
In 2008, beef supplied by Westland/Hallmark was found to be unsuitable for human consumption. It became a sensitive issue as most of this beef was used in school lunch program. More than 140 million pounds of the meat was recalled under an order of the U.S. Department of Agriculture. In a landmark settlement, Westland/Hallmark had to fork out $500 million to a group for animal welfare and the Federal Government. Till now this is the costliest meat recall ever.
Sony Batteries for Dell Laptops
In 2006 Dell laptops were found to be heating up too much. The heat was so much that many of the laptops caught fire. The fault was identified. It was the overheating of the lithium ion batteries made by Sony Corporation. As a result Dell had to recall more than 4 million laptops and the recall cost the two companies around $400 million together.
Tylenol by Johnson & Johnson
In the history of recalls, the Tylenol recall by Johnson & Johnson in 1982 is a landmark. Reports of deaths from using potassium cyanide laced Tylenol came in from Chicago. It was found out that the deaths resulted from adulteration and criminal intentions and the company had nothing to do with the deaths. Still, Johnson & Johnson recalled all the 31 million bottles of Tylenol capsules and replaced them with tamper-proof packs. It cost the company over $100 million, but all for a good cause.
Salmonella lies at the root of another costly recall. In 2006 Cadbury-Schweppes had to recall over a million chocolate bars when the fear of salmonella infection swept UK and Ireland. The recall cost the company more than £20 million or around $30 million. It not only hit Cadbury-Schweppes, but actually saw a fourteen percent drop in candy sales during that period.
Whenever anything interferes with children’s health, the matter turns serious. Mattel toys understood this when they had to recall toys produced in China due to the fear that the paint used in such toys contained excessive amount of lead. The toys included Barbie too. The cost of the recall was estimated at around $30 million.
In UK, Food Standards Agency found out that chili powder being used in over 550 products contained a carcinogenic dye commonly known as Sudan-1. It resulted in recall of various items using such adulterated chili powder. The combined estimate of all such recalls is estimated to run into millions of dollars.