Like so many people my mouth was agape watching the 60 Minutes story on Lumber Liquidators this past Sunday. Some of the things that somewhat shocked me are as follows:
- 60 Minutes going undercover with cameras in factories in China. I thought those days were over. I guess not. Although it was an interesting story I can’t help but see a little China bashing with this story. It just makes all Chinese factories look bad. Many of them are. But many are not. And who is to say what was really going on here. Was the factory acting under their own initiative and mislabeling the lumber to cut costs and deceive Lumber Liquidators or were they under the direction of Lumber Liquidators to do so ? This was not clear in the story. Let’s just say that I am sure 60 Minutes will be persona non grata in China for a while.
- The factory manager admitting that the plywood was not compliant with US standards. Why he would do this, I don’t know. The Chinese are too smart to be so foolish and in fact I have never met anyone in China, not least a factory manager, who willingly admitted to wrongdoing. I mean why would a factory manager admit to a prospective new buyer (which is what the 60 Minutes team was posing as) that his factory was cheating an overseas customer? If I were visiting a factory in China with the view to giving them an order and the manager admitted to me that he was engaging in duplicity with another customer that would be the end of my interest. So I was a little skeptical about that part of the segment. Not to mention that a natural follow up question, namely, why the factory was doing this, was never asked or, if it was, the answer was not included in the segment.
- The fact that Lumber Liquidators would not test orders before they shipped from China. It is standard to do so. You pull a few pcs from production, send them to Intertek or SGS to make sure they are OK and if they pass you ship. If they were not doing this they were just not doing their Due Diligence.
- That a publicly traded company like Lumber Liquidators would not have Western personnel monitoring their factories in China but would leave everything to the factories. I mean they certainly could have afforded this. If this is true, then they were just stupid beyond belief.
In case you missed it the entire 60 Minutes segment is published on you tube. It is worth watching. .