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CPSIA: Working with related industries and kindred
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Kathleen F.
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PostPosted: Sat Dec 06, 2008 3:33 pm    Post subject: CPSIA: Working with related industries and kindred Reply with quote

Watch this space, just needed the place holder for another entry but I just got 13 different emails from Rick Woldenberg with tons of info that I will be posting. We'll use this thread with the goal of joining forces or keeping tabs on other industries related to the legislation.

the 10th email down, contains a huge list of email addresses to legislator's staffs etc.


Last edited by Kathleen F. on Mon Dec 08, 2008 11:50 am; edited 2 times in total
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PostPosted: Sat Dec 06, 2008 7:46 pm    Post subject: RW email, 2 of 12 Financial Consequences ... Reply with quote

An email from Rick to Falvey
Quote:
From: Rick Woldenberg
Sent: Fri 11/7/2008 1:16 AM
To: cfalvey@cpsc.gov
Cc: nnord@cpsc.gov; jmartyak@cpsc.gov; judith.bailey@mail.house.gov
Subject: The Financial Consequences of Retroactive Application of the CPSIA

Dear Ms. Falvey,

Per our conversation today, I am writing you to express my deep concern over the dire financial consequences of your office's September 12th legal opinion ("September 12th Opinion") that the new safety standards of the CPSIA apply retroactively to existing inventory.

It is unfortunate that so many people misread the issue of "financial consequences" to refer simply to the cost of the inventory. Yes, as covered in detail in today's panel discussion, companies in the chain of commerce (manufacturers, distributors and retailers) have little practical ability to make existing inventory "go away". In that sense, the retroactive application of the CPSIA is in fact disastrous. Yet, the implications of the September 12th Opinion are far deeper and more threatening. A necessary result of the purported retroactive effect of the CPSIA on existing inventory will be (a) widespread defaults under loan agreements as of February 10, 2009, (b) widespread failures to obtain audited financial statements for 2008 (another loan default issue), and (c) for public companies, an immediate Sarbanes-Oxley disclosure issue stemming from these problems. Defaults under loan agreements may result in the reduction or termination of available credit to operating companies. It can also trigger cross-defaults among related entities or related agreements, causing even more far-flung financial destruction. For many family businesses, this could result in a total wipeout of all family wealth in one fell swoop.

While these financial consequences have received little attention to date, their potentially highly toxic effect should not be ignored.

Loan Defaults: The typical American company finances its operations with asset-based loans. In this kind of loan, lenders agree to advance a percentage of "Eligible Inventory" as a revolving loan. In other words, the loan floats up and down over its term as the borrower meets its daily cash needs, but overall availability is limited by the value of inventory. The size of borrowing availability is determined each month based on representations called "Borrowing Base Certificates" in which the borrower attests to the value of its inventory, and then makes various representations relating to the definition of "Eligible Inventory". I have attached a typical definition of "Eligible Inventory" for your review. Please note subparts (b) and (e), as well as the final paragraph. Subparts (b) and (e) cannot be attested to after February 9, and under the terms of the last paragraph of the definition of "Eligible Inventory", an undetermined amount of inventory would no longer be "eligible". In addition, the ongoing representation of the typical borrower that they are operating in compliance with law can no longer be made. This has implications for the Borrowing Base Certificate, see below.

In a typical Borrowing Base Certificate, the following language typically appears:

"Pursuant to the terms of that certain [Loan Agreement], we submit this Borrowing Base Certificate to you and certify that the information set forth below and on any attachments to this Certificate is true, correct and complete as of the date of this Certificate. . . . The undersigned hereby certifies that the above information and computations are true and accurate and hereby represents and warrants that as of the date hereof, (i) no Event of Default or Unmatured Event of Default under the Credit Agreement has occurred or is continuing, (ii) the representations and warranties of the Borrower set forth in the Credit Agreement are true and correct in all material respects as of the date hereof, and (iii) the Borrower is in compliance with the covenants set forth in the Loan Agreement."

Any Borrowing Base Certificate with such language after February 9 may not be executed by anyone intent on selling or placing a positive value on inventory existing on February 9. An inability to sign a Borrowing Base Certificate or signing a Borrowing Base Certificate with fraudulent intent is clearly a serious default under any loan agreement.

Consequences of Loan Defaults: Even a technical default must be resolved between borrower and lender. In this case, lenders will have three basic options for action: (a) levy fees to cure or waive the default (this is a typical provision in many loan agreements), (b) insist that the loan agreement be renegotiated, likely to reduce borrowing availablility based on a new, lower advance rate on Eligible Inventory, and/or (c) an outright and possibly immediate refusal to lend. Notably, if existing inventory continually becomes contraband under the September 12th Opinion as lead and lead-in-paint standards ratchet down over time, this cascade of defaults will repeat again and again.

It can be anticipated that many companies will find credit declining or terminated as a result of these defaults. This will have a dramatic effect on these companies' investable capital and their ability to maintain a stable workforce.

Audited Statements: Many loan agreements require audited financial statements at the end of every year. All public companies provide audited statements. In preparing audited statements, independent accountants will insist on "testing" inventory valuations. Furthermore, they will take into account events occurring after the close of the period, as such events could expose misleading information in the financial statements for the current period. In the case of retroactive effect on existing inventory, the pending change in valuation of inventory as of February 10, 2009 will make it impossible to certify 2008 financials without serious and negative qualifications (if at all). This failure would have an immediate effect on any company under its loan agreement (and in the public markets, if applicable), resulting in reduction or termination of available credit. Recent events on Wall Street demonstrate the serious threat posed by sudden losses of available credit, and the consequential financial destruction and loss of jobs.

Sarbanes-Oxley: The financial implications above clearly constitute a material financial event and create immediate issues under Sarbanes-Oxley for any public company. The fact that this issue has not yet been disclosed by any public company is troubling and potentially creates personal liability for many public company officers, including possible criminal liability.

The conclusion that the CPSIA applies retroactively to inventory is an inherently technical legal matter, involving detailed analysis of unbending rules of law. It should be no surprise then that equally technical financial issues emerge in its wake based on precise readings of unbending contracts and GAAP rules. In this case, the above financial/contractual issues are real and will get the attention of the financial community. Lenders have no incentive to be "understanding" in their appreciation of the CPSIA or its good intentions. Good intentions don't repay loans, and contraband inventory makes for poor collateral. And once lenders are provided with an incentive to act (to preserve their own capital), the dominoes will start to topple - ending where? ending how?

The CPSC needs to reconsider its opinion urgently and to render a clean, clear and well-publicized opinion that the CPSIA does NOT apply retroactively to existing inventory. Time is of the essence.

Thank you for considering my view on this important topic.

Sincerely,

Richard Woldenberg
Chairman
Learning Resources, Inc.


Included was an attached document, pasted below (in its entirety)
Quote:
“Eligible Inventory” shall mean all Inventory of the Borrowers which meets each of the following requirements:

(a) it is subject to a perfected, first priority Lien in favor of the Bank and is not subject to any other assignment, claim or Lien other than Permitted Liens that is not superior to the Lien in favor of the Bank;

(b) it is salable;

(c) it is in the possession and control of the Borrowers and it is stored and held in facilities owned by the Borrowers or any Subsidiary or, if such facilities are not so owned, the Bank is in possession of a Collateral Access Agreement with respect thereto;

(d) it is not Inventory produced in violation of the Fair Labor Standards Act and subject to the “hot goods” provisions contained in Title 29 U.S.C. §215;

(e) it is not subject to any agreement or license which would restrict the Bank’s ability to sell or otherwise dispose of such Inventory;

(f) it is located in the United States or in any territory or possession of the United States that has adopted Article 9 of the Uniform Commercial Code;

(g) it is (A) not “in transit” to the Borrowers unless such Inventory is (1) fully insured; (2) certified by the Borrowers as being “in transit;” and (3) of an aggregate value of $_______ or less at any one time, or (B) not held by the Borrowers on consignment;

(h) it is not “work-in-progress” Inventory;

(i) it is not supply items, packaging or any other similar materials;

(j) it is not identified to any purchase order or contract to the extent progress or advance payments are received with respect to such Inventory; and

(k) it does not breach in any material respect any of the representations, warranties or covenants contained in this Agreement pertaining to Inventory set forth in the Loan Documents;

Inventory which is at any time Eligible Inventory but which subsequently fails to meet any of the foregoing requirements shall forthwith cease to be Eligible Inventory until such time as it again meets the criteria for Eligible Inventory. Eligible Inventory shall be discounted by the percentages or amounts reserved against Inventory as set forth in the Borrowers financial statements.


Last edited by Kathleen F. on Sat Dec 06, 2008 8:17 pm; edited 2 times in total
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PostPosted: Sat Dec 06, 2008 8:07 pm    Post subject: RW 3of12 Reconsideration of Advisory Opinion Reply with quote

This email subject line is Request for Reconsideration of the CPSC OGC's Advisory Opinion on the Retroactive Application to Inventory of Lead Limits. It is a pdf file, originally sent 11/4/08 to Cheryl Falvey by Brown & Gidding PC. While not specifically mentioned, B&G represents huge clients. One unnamed client (a retail enterprise with thousands of stores) has estimated their inventory liability to exceed 500 million dollars. I'd gotten this file from another party earlier but I wasn't sure I could release it. Since then I learned all of Falvey's convos and correspondence must be released publicly but I didn't know that before. Anyway I include it here now (pdf). While a legal doc, it's not a bad read altho the scope of the problems it describes are pretty scary stuff.
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PostPosted: Sat Dec 06, 2008 8:16 pm    Post subject: RW 4 of12 Further Comments on Retroactive Application Reply with quote

Quote:
From: Rick Woldenberg
Sent: Mon 11/10/2008 10:46 AM
To: cfalvey@cpsc.gov
Cc: nnord@cpsc.gov; jmartyak@cpsc.gov; judith.bailey@mail.house.gov; 'christian.fjeld@mail.house.gov'; 'brian.mccullough@mail.house.gov'; 'brian_hendricks@hutchison.senate.gov'; 'christine_kurth@commerce.senate.gov'; 'david@commerce.senate.gov'; 'shannon.weinberg@mail.house.gov'; 'jhorner@cpsc.gov'
Subject: Further Comments on Retroactive Application of the CPSIA

Dear Ms. Falvey,

Please find attached my supplemental comment letter dated November 10 relating to your September 12 Advisory Opinion.

Sincerely,

Richard Woldenberg
Chairman
Learning Resources, Inc.


The mentioned file is here. In it he mentions why corporate america has been largely muffled on criticising the CSPC; I'd heard there was arm twisting going on but didn't know where it originated.
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PostPosted: Sat Dec 06, 2008 8:27 pm    Post subject: RW 5 of12 Retroactive Application of the CPSIA Reply with quote

Quote:
From: Rick Woldenberg
Sent: Thu 11/13/2008 11:48 AM
To: 'christian.fjeld@mail.house.gov'
Cc: 'nnord@cpsc.gov'; 'jmartyak@cpsc.gov'; 'judith.bailey@mail.house.gov'; 'brian.mccullough@mail.house.gov'; 'brian_hendricks@hutchison.senate.gov'; 'christine_kurth@commerce.senate.gov'; 'david@commerce.senate.gov'; 'shannon.weinberg@mail.house.gov'; 'jhorner@cpsc.gov'; 'cfalvey@cpsc.gov'
Subject: Retroactive Application of the CPSIA

Christian,

When we met last Friday, you asked that I send you copies of the comment letters I sent on the CPSIA from before its passage. Notably, I was unable to find anyone associated with this bill that remembered receiving a single letter from me. Thank you for asking for the copies. I have attached the four letters I sent. Three of the letters were sent to every member of the House and Senate committees considering the CPSIA, so the letters to Bobby Rush attached are mirrored with letters to each and every other member involved. [I can provide those letters, too, upon request.] I also sent letters to Nancy Pelosi, one of which is attached hereto.

Notably, none of these detailed letters say ANYTHING about retroactive effect on inventory. Apparently, I was not aware of this threat at that time, although as you can see from the letters, I was certainly delving into the details of this law. If retroactive effect was so essential to the legislation, how is it that it escaped my attention? How did I and the rest of industry miss this critical point?

Thank you for considering my views on this urgent matter.

Sincerely,
Richard Woldenberg

The mentioned letter is here.
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PostPosted: Sat Dec 06, 2008 8:46 pm    Post subject: RW 6 of12 Retroactive Application of the CPSIA Reply with quote

This is the first of Rick's emails that I'd read (forwarded from someone else) where he mentions the liability that this law creates in its conflict with Sarbanes-Oxley. The email is also interesting in that it explains the game of hot potato that retailers are playing (who'd blame them). Lss, most product will be out of stores before the 2/10 cut off.
Quote:
From: Rick Woldenberg
Sent: Fri 11/14/2008 7:48 AM
To: cfalvey@cpsc.gov
Cc: 'nnord@cpsc.gov'; 'jmartyak@cpsc.gov'; 'judith.bailey@mail.house.gov'; 'brian.mccullough@mail.house.gov'; 'brian_hendricks@hutchison.senate.gov'; 'christine_kurth@commerce.senate.gov'; 'david@commerce.senate.gov'; 'shannon.weinberg@mail.house.gov'; 'jhorner@cpsc.gov'; christian.fjeld@mail.house.gov
Subject: RE: Retroactive Application of the CPSIA

Dear Ms. Falvey,

I am writing in opposition to your legal opinion dated September 12, 2008 that the CPSIA has retroactive effect on existing inventory (the Falvey Opinion). This is my third letter on this subject. I wish to amplify one point for your consideration.

First, I would like to recap my points:

1. The Falvey Opinion will cause widespread loan defaults in corporate America.
2. The Falvey Opinion will prevent those same companies from obtaining audited financials at year end 2008 and perhaps thereafter.
3. The foregoing two issues create serious Sarbanes-Oxley issues for many public companies and officers of those companies.

[N.b., I am now aware of THREE COMPANIES that have filed comments with you acknowledging loan defaults and problems with audited financials, and one company that acknowledged Sarbanes-Oxley issues. Have you consulted with the SEC on the impact of the Falvey Opinion?]

4. Existing Inventory is safe and appropriate to sell off.
5. The silence of corporate America is coerced, not voluntary, and cannot be taken as quiet acceptance.
6. By letter to Christian Fjeld and cc'd to you, I have submitted evidence that the purported retroactive effect of the CPSIA was not known to the public or the business community before passage of HR 4040, raising serious questions of due process. It also raises important questions about the true intent of the legislation.

I want you to know what is happening in the marketplace in direct response to the Falvey Opinion. It is my understanding that Wal-Mart has informed its suppliers of children's products that it intends to return all merchandise, regardless of age, that cannot be proven to comply with the new standards. Supposedly, it intends to complete this transfer by February 10. At least two other major retailers are rumored to have taken a similar position. This tug-of-war over existing inventory is actually a game of "hot potato": whoever ends up with the inventory on February 10 has a massive, perhaps fatal financial problem. Thus, no one is talking about how to sell off existing inventory (the old "yard sale" idea) - everyone is focusing on how to stick the inventory (the problem) with someone else. We are deathly afraid that Wal-Mart's plan will trigger a massive inventory "run on the bank" where all of our dealers will demand to return their unsold inventory, a scenario implying a stand-off between thousands of companies over a financial issue triggered by the Falvey Opinion. As previously noted, it is certainly true that we cannot afford to absorb the hit on our existing inventory. The notion that we could somehow survive the burden of absorbing the entire U.S. supply chain's inventory of our products is nonsensical. If this happens, you should expect widespread corporate bankruptcies.

No sane person could argue that Congress "intended" this result. Clearly, Congress in its rush to punish the entire children's products industries (shoes, electronics, clothing, toys, sports equipment, novelties, books, lamps, etc.) for perceived "bad acts" drafted a law without regard to consequences. It's time to speak the truth - this was not intended by Congress because it couldn't have been intended by Congress. If that's so, the Falvey Opinion must be reversed.

Thank you for considering my views on this urgent matter.

Sincerely,

Richard Woldenberg
Chairman
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PostPosted: Sat Dec 06, 2008 8:54 pm    Post subject: RW 7 of12 Testing Quotes Reply with quote

Wow, this one is pretty damning. Price quotes of testing. RW says testing costs have already increased 5x to 20x.
Quote:
From: Rick Woldenberg
Sent: Wed 11/26/2008 12:34 PM
To: Mary Toro (MToro@cpsc.gov)
Cc: Etienne Veber; Nancy Nord (nnord@cpsc.gov); Joe Martyak (jmartyak@cpsc.gov); 'tmoore@cpsc.gov'; 'jmullan@cpsc.gov'; 'Judith.bailey@mail.house.gov'; 'Cathy.hurwit@mail.house.gov'; 'Christian.fjeld@mail.house.gov'; 'Brian.mccullough@mail.house.gov'; 'Shannon.weinberg@mail.house.gov'; 'Brian_hendricks@hutchison.senate.gov'; 'david@commerce.senate.gov'
Subject: Cost of Testing

Mary,

I want to continue our dialogue over the issues presented by the CPSIA. I realize you are swamped with inquiries from many sectors, so I thought I would send this comment in via email.

I have previously raised the serious issue of the high cost of testing under the CPSIA. To be clear, the issue is not about the testing per se, rather it is the cost of the testing to prove compliance with the CPSIA. It is our legal obligation to produce products that comply with the law, of course. Financing proof of that compliance is the problem that confronts industry right now.

The attached lab test is a great example of the dilemma caused by the CPSIA testing requirements. The item in question is a new item called Let’s Tackle Kindergarten. This item is similar to other items in our product line and is quite uncontroversial from a safety standpoint. Because of our experience testing virtually identical items, we know this item is in compliance with the CPSIA on phthalates, lead and its other requirements. Nevertheless, to prove compliance, we will apparently have spend $6,144.06 on myriad tests. The product will be no more or less safe after this expenditure. No child will be safer or better protected. Our company will simply be much poorer.

High testing costs will have a significant effect on our business and businesses like ours. First, the cost of testing has increased about 5x – 20x under the new law. We do not believe these costs can be recovered because under current economic conditions, raising prices is not an option. Thus, the breathtaking increase in cost becomes part of our overhead.

The testing costs cannot be absorbed by small and medium-sized businesses. At typical net profit levels prevailing in the children’s products industry, the $6,144 cost of testing probably exceeds the anticipated total net profit derived from three or more years’ sales of the item. This does NOT take into account the cost of development, the cash expense of buying the inventory or the cost of owning inventory (usually estimated at 2.5% per month). Given that children’s products have finite commercial lives (three years is a good life for a consumer product), the CPSIA test costs might exceed the present value of creating a new item for many, if not most, businesses. So, will this product ever come to market? Not under the CPSIA. The only products left for sale will be mass market items where the scale of their production runs can support this wasteful expense. I believe this “mass market world” is not in the national interest as specialty companies like Learning Resources are an important means by which consumers obtain the products and services they need in our economy.

Notably, the gross cash expense required to finance these tests right now is literally unbearable. The law requires that all of this testing must be completed on all products in our line all at once. Several years of “catch-up” testing must be financed in just a matter of a couple months, bunching up the vast expense into one or two financial statements. Together with other excessive costs suddenly imposed by the CPSIA (for instance, lot traceability infrastructure), the economics of producing children’s items are being distorted into an unrecognizable form. If children’s products companies cannot produce a fair profit, they won’t be able to attract financing or risk capital, and the jobs (and products) will disappear. This problem needs a solution fast, and if we can’t come up with one, no one in Congress or the CPSC should be surprised to see bankruptcies rise inexorably as a result. The price will be paid.

I would appreciate the opportunity to dialogue with you on these rules and other negative incentives under the CPSIA. I am confident that through a partnership with industry, the CPSC can develop a common sense approach to safety rules and enforcement that will reward those companies committed to compliance while discouraging the bad actors who give the children’s products industry a bad name. The time to act is now. My associates in the business community are under intense pressure to pay these exorbitant testing bills – and once the money is shipped to the Chinese testing companies, there will be no getting it back.

Thank you for considering my views on this important topic.

Sincerely,

Richard Woldenberg
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PostPosted: Sat Dec 06, 2008 8:59 pm    Post subject: RW 8 of12 Killing the niche toy market Reply with quote

In reference to Selecta (german toy maker) exiting U.S. market
Quote:
From: Rick Woldenberg
Sent: Fri 12/5/2008 4:45 PM
To: Judy Bailey (judith.bailey@mail.house.gov); 'christian.fjeld@mail.house.gov'
Cc: 'cfalvey@cpsc.gov'; 'jmullan@cpsc.gov'; Shannon Weinberg (shannon.weinberg@mail.house.gov); Brian McCullough (brian.mccullough@mail.house.gov); Will Carty (william.carty@mail.house.gov); Nancy Nord (nnord@cpsc.gov); Joe Martyak (jmartyak@cpsc.gov)
Subject: FW: Breaking News: Rising costs drive out German toyco

The note below is consistent with my message on the CPSIA. The expense of PROVING compliance with the law is going to have a very strong negative impact on the market for children’s products. These choices are being made on a daily basis by thousands of companies now. In a product development meeting at our company this week, our development team informed us that they are raising the required first year revenues for new products by as much as 30% to cover the cost of new tests. The threshhold will be even higher for certain materials and pure toy products. We do not believe these test reports will result in ANY change in product design or materials. The impact of these new costs (including the cost of tracking lots) will destroy niche markets serving “orphan” markets like blind children and other special needs, and will make it exceptionally risky (financially) to start businesses making children’s products. It will kill small businesses manufacturing children’s items because the economics of their products will be ruined. These financial impacts, which are UNRELATED TO SAFETY, need to be explained clearly to the Rush Subcommittee so that some form of relief can be crafted. The message below is just the beginning. If we act quickly, we can fix the CPSIA to preserve safety gains without imperiling a marketplace for children’s products that comprises literally tens of thousands of companies, millions of products and perhaps 60% of the U.S. economy. This is a big issue which we cannot afford to ignore.

Rick Woldenberg

Chairman
Learning Resources, Inc.
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PostPosted: Sat Dec 06, 2008 9:16 pm    Post subject: RW 9 of12 Interest groups attack Reply with quote

Quote:
From: Rick Woldenberg
Sent: Wed 12/3/2008 6:42 PM
To: Judy Bailey (judith.bailey@mail.house.gov)
Cc: 'nnord@cpsc.gov'; 'jmartyak@cpsc.gov'; 'cfalvey@cpsc.org'; Etienne Veber; 'christian.fjeld@mail.house.gov'; Brian McCullough (brian.mccullough@mail.house.gov); Shannon Weinberg (shannon.weinberg@mail.house.gov); Will Carty (william.carty@mail.house.gov); 'cathy.hurwit@mail.house.gov'
Subject: A couple more documents relevant to the upcoming hearings

Judy,

I have attached a recent attack launched on toys in the press by Healthytoys.org. See attached. These brazen attacks are highly misleading and represent a form of commercial slander. We are powerless to stop these people from manipulating the media to give the unfortunate and misleading impression that all toy companies lack integrity or concern for consumers. I hope the Committee will take steps to not fan these flames further. I believe this kind of publicity results from the lopsided debate on the CPSIA. It makes it tough to sell educational toys – and that’s just not fair or deserved.

I also wanted you to see the Letter to the Editor appearing in the Daily Herald today (a major Northern Illinois newspaper chain) written by one of our employees. It’s her opinion, and was not written by me. Please note the supportive views of the three comments (written by people who unknown to me). I hope the members of the Committee are hearing people like Jennifer Connolly and the other readers of the Daily Herald. They are the ones on the front lines of the economy and understand the true nature of the “crisis” in children’s product safety in the marketplace.

Thanks.
Rick
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PostPosted: Sat Dec 06, 2008 9:28 pm    Post subject: RW 10of12 "Hot Potato" Reply with quote

Attached is an article published in Journal of Commerce that explains the whole retroactivity thing and the game of hot potato being played with inventory. Kind of like death by musical chairs except if you're lucky enough to be not holding the inventory when the music stops playing, you're the only one who lives, everybody else dies.

Quote:
From: Rick Woldenberg
Sent: Wed 11/26/2008 9:15 PM
To: cfalvey@cpsc.gov; nnord@cpcs.gov; Joe Martyak (jmartyak@cpsc.gov); jmullan@cpsc.gov; tmoore@cpsc.gov; pweller@cpsc.gov; mgougisha@cpsc.gov; Judy Bailey (judith.bailey@mail.house.gov); Cathy.hurwit@mail.house.gov; Christian.fjeld@mail.house.gov; Brian McCullough (brian.mccullough@mail.house.gov); Shannon Weinberg (shannon.weinberg@mail.house.gov); Brian Hendricks (brian_hendricks@hutchison.senate.gov); david@commerce.senate.gov
Cc: bridget_petruczok@boxer.senate.gov; michael_daum@cantwell.senate.gov; bill_ghent@carper.senate.gov; hap_rigby@demint.senate.gov; frannie_wellings@dorgan.senate.gov; david_quinalty@ensign.senate.gov; james_chang@inouye.senate.gov; jamie_phillips@kerry.senate.gov; jonathan_becker@klobuchar.senate.gov; michelle_schwartz@lautenberg.senate.gov; lee_dunn@mccain.senate.gov; sonya_wendell@mccaskill.senate.gov; christopher_day@nelson.senate.gov; andrew_grobmyer@pryor.senate.gov; james_reid@rockefeller.senate.gov; betsy_mcdonnell@smith.senate.gov; matthew_hussey@snowe.senate.gov; christine_kurth@stevens.senate.gov; mike_orielly@senunu.senate.gov; brendan_plack@thune.senate.gov; garret_graves@vitter.senate.gov; hugh_carroll@wicker.senate.gov; sarah.baldwin@mail.house.gov; elissa.levin@mail.house.gov; christopher.schepis@mail.house.gov; theresa.lavery@mail.house.gov; greg.louer@mail.house.gov; brian.diffell@mail.house.gov; amy.ingham@mail.house.gov; laura.vaught@mail.house.gov; matt.johnson@mail.house.gov; saul.hernandez@mail.house.gov; mike.kelly@mail.house.gov; aaron.shapiro@mail.house.gov; rick.axthelm@mail.house.gov; steve.plevniak@mail.house.gov; scott.cleveland@mail.house.gov; jonathan.smith@mail.house.gov; pat.cavanagh@mail.house.gov; rachelle.wood@mail.house.gov; michael.gaffin@mail.house.gov; derick.apt@mail.house.gov; aaron.ringel@mail.house.gov; angela.manso@mail.house.gov; dana.lichtenberg@mail.house.gov; derrick.ramos@mail.house.gov; elizabeth.stack@mail.house.gov; julie.hulings@mail.house.gov; lori.pepper@mail.house.gov; josh.connolly@mail.house.gov; david.bahar@mail.house.gov; mark.bayer@mail.house.gov; Neeta.Bidwai@mail.house.gov; kyle.victor@mail.house.gov; chris.debosier@mail.house.gov; morgan.jones@mail.house.gov; matthew.dockham@mail.house.gov; tuley.wright@mail.house.gov; cade.king@mail.house.gov; betsy.christian@mail.house.gov; chris.herndon@mail.house.gov; Mike.Ward@mail.house.gov; laura.abshire@mail.house.gov; randi.meyers@mail.house.gov; Greta.Hanson@mail.house.gov; liz.muro@mail.house.gov; matt.mandel@mail.house.gov; jamie.euken@mail.house.gov; jon.oehmen@mail.house.gov; brad.schweer@mail.house.gov; dana.grayson@mail.house.gov; michael.beckerman@mail.house.gov; valerie.henry@mail.house.gov; Becky.Claster@mail.house.gov; robin.appleberry@mail.house.gov; tiffany.guarascio@mail.house.gov; jeff.mortier@mail.house.gov; kenneth.schwarz@mail.house.gov; Carter Keithley (ckeithley@toy-tia.org); Mary Toro (MToro@cpsc.gov); Patrick Magnuson (patrick.magnuson@mail.house.gov)
Subject: Journal of Commerce Article on CPSIA 11-24-08

Please see this important article in the Journal of Commerce (Nov. 24 issue) setting out some of the very serious business issues presented by the CPSIA. Please note the theme that the financial burden and needless expenses imposed by the CPSIA on business has no relation to increased product safety. The article makes the case that the CPSIA is an unproductive tax on business, which is unthinkable under current economic conditions. The business community is not hostile to the safety objectives of the CPSIA but is defenseless against the inefficiencies imposed by many aspects of the CPSIA. It is unrealistic to believe that businesses are selectively suffering from these provisions because they are the "bad guys" - there is no data to support that view. We are all withering under the burden.

There are ways to fix the CPSIA to preserve the beneficial changes in safety standards without crushing thousands of businesses in the process. I urge you to consider taking immediate steps in partnership with industry to relieve the burden on business imposed by the CPSIA.

Richard Woldenberg
Chairman
Learning Resources, Inc.
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PostPosted: Mon Dec 08, 2008 12:07 pm    Post subject: Rick's message of 11/26/2008 Reply with quote

This is Rick's letter he sent to his distribution list dated 11/26. There are two files mentioned therein. These are here (pdf) and here (xls). If I could bring another item to your attention, Rick says:

Quote:
a. First, write your Congressman and your Senators. This is very important. You can find your Congressman and Senator using the TIA's website, see http://capwiz.com/toyassociation/dbq/officials/?zbrandid=4083&zidType=CH&zid=598563&zsubscriberId=1001152853. On this site, just enter your zip code and you will see links for your Congressman and Senators. Under the pages for your representatives, you will see a tab marked "Contact". If you click on this tab, you see a line which says (for example) "Contact Sen. Richard Durbin via Web Form". By clicking on "Web Form", you will be able to compose a 10,000 character message and send it right away. You can cut and paste our sample letters in this space if you wish.


Here's the letter now, in its entirety:

Quote:
Dear Friend,

I sent you an email last week alerting you to the serious legal issues we all face under the Consumer Product Safety Improvement Act of 2008 (CPSIA). Since that time, the General Counsel of the CPSC has issued an advisory opinion indicating that the new standards on phthalates are prospective (unlike the September 12 opinion on the retroactive effect of the new lead standards). While this news was greeted with relief by the children's products industry, it is nevertheless only an advisory opinion and notably, Senator Barbara Boxes (D-CA) has reportedly petitioned for the revocation of the phthalates opinion. We have posted the November 14 phthalates opinion on our special webpage devoted to the issues presented by the CPSIA (http://www.learningresources.com/category/id/104512.do). We have also added a Blog section where you can share your views and connect with other companies similarly affected by this troubling law.

Letter Writing Update:

In the few days since you received the Call to Action, we have received word that Congressional staffers have been flooded with letters and emails. Thank you! Based on feedback we have received, I want to clarify how you should focus your continuing letter-writing efforts:

a. First, write your Congressman and your Senators. This is very important. You can find your Congressman and Senator using the TIA's website, see http://capwiz.com/toyassociation/dbq/officials/?zbrandid=4083&zidType=CH&zid=598563&zsubscriberId=1001152853. On this site, just enter your zip code and you will see links for your Congressman and Senators. Under the pages for your representatives, you will see a tab marked "Contact". If you click on this tab, you see a line which says (for example) "Contact Sen. Richard Durbin via Web Form". By clicking on "Web Form", you will be able to compose a 10,000 character message and send it right away. You can cut and paste our sample letters in this space if you wish. You can also go to your representatives' websites to obtain other contact information.

b. Second, we need to broaden our letter-writing to include the staff of all federal Conferees and other members of the relevant House and Senate Commerce Committees. Please find below a comprehensive list of contacts for your letters:

Send copies of your advocacy letters to:

Original List: cfalvey@cpsc.gov; nnord@cpcs.gov; jmartyak@cpsc.gov; jmullan@cpsc.gov; Judith.bailey@mail.house.gov; Cathy.hurwit@mail.house.gov; Christian.fjeld@mail.house.gov; Brian.mccullough@mail.house.gov; Shannon.weinberg@mail.house.gov; Brian_hendricks@hutchison.senate.gov; david@commerce.senate.gov

Additional cc. List: bridget_petruczok@boxer.senate.gov; michael_daum@cantwell.senate.gov; bill_ghent@carper.senate.gov; hap_rigby@demint.senate.gov; frannie_wellings@dorgan.senate.gov; david_quinalty@ensign.senate.gov; james_chang@inouye.senate.gov; jamie_phillips@kerry.senate.gov; jonathan_becker@klobuchar.senate.gov; michelle_schwartz@lautenberg.senate.gov; lee_dunn@mccain.senate.gov; sonya_wendell@mccaskill.senate.gov; christopher_day@nelson.senate.gov; andrew_grobmyer@pryor.senate.gov; james_reid@rockefeller.senate.gov; betsy_mcdonnell@smith.senate.gov; matthew_hussey@snowe.senate.gov; christine_kurth@stevens.senate.gov; mike_orielly@senunu.senate.gov; brendan_plack@thune.senate.gov; garret_graves@vitter.senate.gov; hugh_carroll@wicker.senate.gov; sarah.baldwin@mail.house.gov; elissa.levin@mail.house.gov; christopher.schepis@mail.house.gov; theresa.lavery@mail.house.gov; greg.louer@mail.house.gov; brian.diffell@mail.house.gov; amy.ingham@mail.house.gov; laura.vaught@mail.house.gov; matt.johnson@mail.house.gov; saul.hernandez@mail.house.gov; mike.kelly@mail.house.gov; aaron.shapiro@mail.house.gov; rick.axthelm@mail.house.gov; steve.plevniak@mail.house.gov; scott.cleveland@mail.house.gov; jonathan.smith@mail.house.gov; pat.cavanagh@mail.house.gov; rachelle.wood@mail.house.gov; michael.gaffin@mail.house.gov; derick.apt@mail.house.gov; aaron.ringel@mail.house.gov; angela.manso@mail.house.gov; dana.lichtenberg@mail.house.gov; derrick.ramos@mail.house.gov; elizabeth.stack@mail.house.gov; julie.hulings@mail.house.gov; lori.pepper@mail.house.gov; josh.connolly@mail.house.gov; david.bahar@mail.house.gov; mark.bayer@mail.house.gov; Neeta.Bidwai@mail.house.gov; kyle.victor@mail.house.gov; chris.debosier@mail.house.gov; morgan.jones@mail.house.gov; matthew.dockham@mail.house.gov; tuley.wright@mail.house.gov; cade.king@mail.house.gov; betsy.christian@mail.house.gov; chris.herndon@mail.house.gov; Mike.Ward@mail.house.gov; laura.abshire@mail.house.gov; randi.meyers@mail.house.gov; Greta.Hanson@mail.house.gov; liz.muro@mail.house.gov; matt.mandel@mail.house.gov; jamie.euken@mail.house.gov; jon.oehmen@mail.house.gov; brad.schweer@mail.house.gov; dana.grayson@mail.house.gov; michael.beckerman@mail.house.gov; valerie.henry@mail.house.gov; Becky.Claster@mail.house.gov; robin.appleberry@mail.house.gov; tiffany.guarascio@mail.house.gov; jeff.mortier@mail.house.gov; kenneth.schwarz@mail.house.gov; tmoore@cpsc.gov; pweller@cpsc.gov; mgougisha@cpsc.gov

I have attached a list matching these addresses to members of Congress for your information. Please send them all emails or faxed letters expressing your views on this law and its effects on your businesses and your community. I recommend sending emails to all of these staffers, even if the Senator or Congressman was defeated in the November elections. In the event that more names or corrections are identified, I will forward that information in future messages and post on our special website.

As in my previous letters, please feel free to forward or adapt this letter. We need to get the word out far and wide!

Fighting Back:

I have attached a recent letter sent to Rep. Jan Schakowsky for your information. As you will see from this letter, I have protested Rep. Schakowsky's broad negative characterization of our products, our businesses and our industry. The media and certain activists (including politicians like Jan Schakowsky) take the liberty of "talking down" our businesses and discouraging consumers from trusting our products or our integrity through rank fear mongering. This has to stop! I hope you will take the opportunity to respond to this kind of commercial slander when you encounter it. Feel free to write Rep. Schakowsky or others when you see unfair remarks in the press or on TV. Send in Letters to the Editor or take other direct action to defend our good names. Together we will stand, but divided we will fall.

Thank you for your help in organizing CPSIA letter writing campaigns. Washington will listen to us if our letters and emails come in sufficient volume. It is easy for newspapers and activists to create fear and to isolate the business community in an environment of hysteria and misplaced anxiety. What they all forget is that the business community is all of us, our neighbors, our friends, the members of our churches and synagogues and so on. Our futures depend on the health of these businesses. We cannot allow our interests to be marginalized as some "fringe" part of American society. Your loud voices of protest will help make that point clearly.

Sincerely,

Richard Woldenberg
Chairman
Learning Resources, Inc.
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Vesta
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PostPosted: Mon Dec 08, 2008 12:52 pm    Post subject: Reply with quote

Ooh, regarding "Request for Reconsideration of the CPSC OGC's Advisory Opinion on the Retroactive Application to Inventory of Lead Limits", page 8 seems to get retailers completely off the hook. That's cool.
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PostPosted: Thu Dec 11, 2008 11:18 am    Post subject: Reply with quote

This is a "safety bulletin" issued by the Toy Industry Association.

Quote:
Inappropriate Phthalates Testing Should Be Avoided Pending CPSC Clarification of Rules

Concerns about chaotic testing of toys to determine compliance with as yet to be implemented phthalate restrictions under the Consumer Product Safety Improvement Act of 2008 (CPSIA) have prompted TIA to issue this bulletin clarifying, to the extent currently possible, issues that have emerged related to attempts to apply future phthalate requirements to toy products.

I can't find the full text of the safety bulletin online but will archive it if someone wants it.
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PostPosted: Thu Dec 11, 2008 3:48 pm    Post subject: Reply with quote

Support from Etsy:

http://www.etsy.com/storque/craftivism/handmade-childrens-items-unintended-consequences-consumer-pr-3056/
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PostPosted: Thu Dec 11, 2008 9:41 pm    Post subject: Reply with quote

Ever heard of the CPSC Bicycle Regulations of 1974? Me neither. But guess what: "Adult products only need a certificate if they are regulated by a CPSC standard." Which the Bicycle Regulations are.

Exemptions are made for helmets, gloves and footwear, but everything else is fair game. They paint bicycles, don't they? According to this article in Bicycle Retailer and Industry News , they have recognized the problems in the bicycle industry and have sought relief:
Quote:

Children’s products manufactured after Dec. 22 must be tested to meet the new lead paint and substrate limits. Products made after Feb. 10, 2009 must meet the new general lead ban and products exceeding the 600 parts per million limit will be deemed hazardous and banned from retail shelves.

Inaccessible parts are not subject to this rule. The CPSC is scheduled to provide more guidance on what is considered inaccessible by Aug. 14 of next year. The bicycle industry has asked CPSC staff to clarify whether certain products like Schraeder valves, spoke nipples and cable ends would be considered inaccessible.


Who knew? I extended them an invitation to join us.
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