Graco agrees to record fine in product safety case

Published: WEDNESDAY, MARCH 23, 2005
Washington: Graco Children's Products agreed Tuesday to pay a record $ 4 million to settle charges that it belatedly reported problems with car seats, high chairs, strollers and other products that have resulted in hundreds of wounded and at least six dead.

The company is also recalling 1.2 million Graco Toddler Beds sold in the United States from 1994 to 2001. The beds are linked to dozens of injuries, including more than a dozen fractures, which occurs when children of members were trapped in the bed with rails or sole.
The United States is the largest penalty ever imposed by the Consumer Product Safety Commission, which announced the settlement and recall.

The penalty was important because "the number of consumer products and the egregiousness of the absence of a report", Hal Stratton, chairman of the Consumer Product Safety Commission, said in an interview.
Under U.S. law, companies must immediately inform the Commission after finding product defects that pose risks of injury or violate federal safety standards. This period is usually interpreted as 24 hours.
But the security agency said Graco and its subsidiary, Century Products, failed to immediately report defects in 16 products sold from 1991 to 2002. Stratton could not say when his agency first learned of possible reporting violations.

Graco denied knowingly violating reporting requirements. He said the penalty "refers to a time prior to Newell's acquisition" of Graco, when the company was under different management and before the implementation of systems "that will ensure that this will not be moving the 'before. "
The products, over 12 million in all, including car seats, infant carriers, high chairs, strollers, swings and beds.
The products have been reminded since September 1997, including action Tuesday. The Commission said it expects to announce two more Graco recalls soon.
The six deaths were linked to Graco Infant Swings, seven million were recalled in April 2000 after reports that babies could fall on the seat of the leg openings or get trapped in them.

More recently, 140000 Graco Travel Lite Infant Swings were recalled in July after the company received 100 reports of children slipping out of faulty seat belts and sustaining injuries such as bloody lips, bumps and bruises.
Acquired by Rubbermaid in 1996, Graco, based in Exton, Pennsylvania, is now a subsidiary of Newell Rubbermaid, formed in 1999.
Newell Rubbermaid shares were 9 cents higher at $ 21.17 in New York Stock Exchange trading Tuesday afternoon they were down 13 percent so far this year.