Shimano to Pay $150,000 Fine Over Faulty Parts

Sports equipment giant Shimano American Corp. will pay a $150,000 fine to settle allegations that it failed to report defects in bicycle cranks soon enough, federal regulators said Wednesday.

Shimano, the Irvine-based subsidiary of Japan’s Shimano Inc., recalled 2.5 million bike cranks in July 1997, including 1 million in North America.

In the two years after the cranks were made, the company received about 630 reports that they broke under certain levels of pressure, resulting in at least 22 injuries. The U.S. Consumer Product Safety Commission said the company kept the information private for too long.

Federal law requires companies to report product problems that could be hazardous to consumers.

Company executives still dispute the government’s accusation that they did not meet federal reporting standards but said Wednesday’s settlement would avert costly litigation.

“While we did not agree with their claim, settling for $150,000 was the easier and less expensive option,” said Devin Walton, Shimano American’s customer service manager.

The recalled cranks--components that connect pedals to bike frames--were manufactured from mid-1994 to mid-1995 and installed in more than 200 low- to mid-priced models of mountain bikes.

The bikes were sold under 49 brand names, including Bianchi, Cannondale, Diamondback, GT, Giant, Huffy, Motiv, Murray, Raleigh, Schwinn, Trek and Univega.

The recalled cranks were thinner and lighter, designed to be more sleek.

In the recall, the largest ever in the U.S. bicycle industry, Shimano provided bike repair shops with substitute cranks and paid them $15 plus postage for each faulty component they removed and replaced.

So far, hundreds of thousands of bikes have been repaired, Walton said. He estimated the recall has cost Shimano $4.5 million.

Shimano is one of the world’s leading makers of bicycle components, including cranks, brakes, shifters and derailleurs. It also makes fishing gear and tackle.

The recalled cranks were part of the Altus, Acera and Alivio groups of components and are numbered FC-CT90, FC-M290 and FC-MC12. Consumers who believe they have bikes with these cranks should call their local bicycle dealer, or Shimano at (800) 353-4719, the Consumer Product Safety Commission said.