TIRE VALVE CRACKS

ON MAY 15, 2008, THE OFFICE OF DEFECTS INVESTIGATIONS OPENED A PRELIMINARY EVALUATION (PE08-036) TO INVESTIGATE THE PREMATURE FAILURE OF DILL AIR CONTROLS PRODUCTS (DILL) SNAP-IN TIRE VALVES BECAUSE OF OZONE CRACKING. AIR LEAKAGE FROM ONE OF THE SUBJECT VALVES IS ALLEGED IN A LAWSUIT AS THE CAUSE OF A FATAL ROLLOVER CRASH OF A 1998 FORD EXPLORER IN NOVEMBER 2007. THE LAWSUIT CLAIMS THAT THE ROLLOVER RESULTED FROM THE SUDDEN FAILURE OF THE RIGHT-REAR TIRE, WHICH ALLEGEDLY WAS CAUSED BY AIR LEAKAGE FROM A DEFECTIVE DILL VALVE. THE VALVE WAS INSTALLED BY A DISCOUNT TIRE STORE IN SEPTEMBER 2006. DISCOUNT TIRE IS A CO-DEFENDANT WITH DILL IN THE LAWSUIT. ODI OPENED PE08-036 BASED ON INFORMATION RECEIVED FROM DILL AND DISCOUNT TIRE IN MEETINGS ON APRIL 30, 2008 AND MAY 12, 2008, RESPECTIVELY. IN RESPONSE TO AN INFORMATION REQUEST FROM ODI, DILL INDICATED THAT IT IMPORTS THE SUBJECT VALVES FROM A MANUFACTURER IN CHINA, TOPSEAL AUTOMOTIVE. TOPSEAL'S ROOT CAUSE ANALYSIS TRACED THE OZONE CRACKING PROBLEM TO A CHANGE IN SUPPLIERS OF A CHEMICAL USED TO PROVIDE OZONE PROTECTION. THE PROBLEM AFFECTED VALVES MADE FROM JULY TO MID-NOVEMBER 2006. DILL INDICATED THAT AFFECTED VALVES SHOULD EXHIBIT VISIBLE CRACKS SHORTLY AFTER BEGINNING SERVICE AND THAT THE CRACKS MAY GROW LARGE ENOUGH TO CAUSE AIR LEAKAGE AFTER APPROXIMATELY 8-14 MONTHS IN SERVICE. ACCORDING TO DILL, APPROXIMATELY HALF OF THE CRACKED VALVES THAT HAVE BEEN RETURNED FROM THE FIELD HAD CRACKS THAT WERE LEAKING AIR. DILL ISSUED AN ADVISORY TO ITS CUSTOMERS (RETAIL TIRE STORES AND DISTRIBUTORS) ON MAY 2, 2008, REQUESTING RETURN OF UNUSED INVENTORIES OF VALVES FROM 2006 PRODUCTION LOTS AND RECOMMENDING INSPECTION PROGRAMS TO DETECT AND REPLACE AFFECTED VALVES. IN JUNE 2008, DILL RELEASED ON ITS WEBSITE PROCEDURES FOR INSPECTING VALVES AND FILING CLAIMS (HTTP://DILLAIRCONTROLS.COM). DILL HAS ALSO HIRED A LABORATORY TO CONDUCT RUBBER CHEMISTRY AND OZONE RESISTANCE TESTING OF RETURNED VALVES FROM EACH OF THE LOTS SHIPPED FROM