Auto Makers Form Network to Fight Counterfeit Parts

General Motors Corp., Ford Motor Co. and DaimlerChrysler said Friday that they have united to fight the production of counterfeit auto parts, which cost the industry 210,000 jobs and an estimated $12 billion annually.

Most of the parts originate in China, and many resemble genuine products, with similar packaging and even fake shipping labels, officials said. An increasing number of counterfeit parts involve safety systems such as brake pads and steering and suspension components, which could endanger the lives of drivers and passengers, the companies said.

“Items that have a direct bearing on the safe operation of our customers’ vehicles are being sold by counterfeiters without the benefit of testing for quality, safety and durability,” said Mike Jordan, president of Ford Automotive Consumer Services Group.

“What’s particularly alarming is that counterfeiters are getting bolder, expanding into a wide variety of parts,” he said.

According to the Federal Trade Commission, $3 billion in counterfeit parts are sold in the United States each year. But the problem is especially acute in the Middle East, where many counterfeit parts made in China are shipped and sold alongside genuine parts, said Tony Bol, GM’s global security and investigations manager.

Three out of five parts sold in the Middle East under GM’s AC Delco brand are fakes, he said.

Individually, the companies have worked with local law enforcement agencies over the last few months to raid counterfeit retail and printing operations in the Middle East, Mexico, Brazil and Argentina, officials said.

As recently as Sept. 5, officials raided an automotive glass factory in China’s Guangdong province, where many counterfeiters are based.

Auto makers working individually have been thwarted in other efforts to crack down on counterfeiters. When they closed in on a counterfeit parts manufacturer, the company would quickly switch to making a different brand of fake parts, said Ed Wetter, brand protection manager with Ford.

The auto makers have formed a “global industry network” to work with law enforcement agencies and governments around the world to try to strengthen patent and trademark protection laws and impose criminal penalties to prevent counterfeiting, they said.

The group expects to step up talks with the government of China and hopes its entry into the World Trade Organization will help the efforts, company officials said.