Cobra Sells Kid’s Bikes Despite CPSC Ban

by

Bikes Meet Lead Content Requirements
Several Steps Ensure Legally Safe Products

Sean Hilbert may be the only motorcycle executive in the U.S. who is legally selling kid’s dirt bikes and ATVs, in spite of a federal ban on many such products.

Most of the high quality racing machines produced and sold by Cobra Motorcycle Manufacturing Company of Hillsdale, Mich., meet the current requirements spelled out in the Consumer Product Safety Improvement Act (CPSIA), he told me the other day. Only one of Cobra’s models is not offered for sale.

Sean Hilbert

Sean Hilbert

Well, now, that’s very interesting. How can that be, when the rest of the industry has been shut down since Feb. 10, 2009, and all other manufacturers have ordered their dealers to pull these products from the showrooms?

Sale of products designed for kids ages 12 and younger that contain more than 600 parts per million of lead content for any part of the product in the machine have been banned since February by the Consumer Product Safety Commission (CPSC).

Yet Cobra keeps selling most of its models.

Hilbert, who is president and CEO, isn’t breaking the law, he says. It’s just that his company is working very hard to produce machines that meet the stiff lead content requirements set by the law that was signed by President Bush last August. How does he do it?

Basically, three ways. First, by presenting certifications from his suppliers that their products don’t exceed the lead limits. Second, by doing a minimal amount of its own testing. And, third, by covering items that contain excess lead levels, thus preventing access to those items. More about these steps later.

What Is Cobra Motorcycle?

Cobra has been producing high quality small displacement racing ATVs and mini bikes since 1993. It has 35 employees and operates out of a 50,000 sq. ft combination office, warehouse and production facility in Hillsdale, Mich., about 100 miles from Detroit.  The building sits on about 10 acres that includes a test track and provides room for expansion of the main facility.

Hilbert tells me that he expects to sell about 1,000 units worldwide this year through a  network of about 125 dealers (100 in the U.S.), generating about $4.5 million in revenue. That’s about what the company did in each of the last two years. ATVs make up about 20% of the total unit sales in its portfolio of two ATVs and three motorcycles.

The MSRPs on these units range from about $3,500 for a CX50 Jr. motorcycle to $8,200 for the most expensive ATV, an ECX 70 (70cc). Of course, you can order a highly customized CX65 CARD motorcycle—a Cobra Advanced Race Development— with custom paint, custom suspension, custom everything, for about $6,400.

How Does Cobra Sell Under the CPSIA?

First, Cobra purchases a minimum amount of outside testing; the cost would be prohibitive if it tested all of its components. “The costs for a small company would be overwhelming,” he says. “It would cost millions of dollars to test every component that might be accessible to small children.” Hilbert estimates that testing could cost $200 and up per component. In the Cobra lineup, there are roughly 4,000 parts that would have to be tested; every small part in a carburetor, for example, would have to be certified under the law.

However, specific tests by independent, certified third party labs are not yet required because the CPSC has not developed rules on how these labs would be certified. Those won’t become effective until Feb. 10, 2010, but when they do the huge expenses involved—coupled with heavy administrative costs— could  put companies like Cobra out of business.

“If that happens,” says Hilbert, “our only options as I see them now would be to sell products illegally—which we wouldn’t do— or shut down the business.”

Even though there are no testing regulations today,  Hilbert, still has to test for lead content.

He does this by obtaining raw material certifications from suppliers of the materials Cobra uses to cast products such as the aluminum for engine cases and wheels and the steel for frames. When Cobra orders steel, for example, it can get a certificate for the entire batch. And since this high strength, low alloy material is the same stuff used for automobile frames, it contains only about 100 ppm of lead.

Cobra has been building frames from this material for years. “We’re lucky we didn’t have to redesign the frame; that could be a huge cost,” says the former Ford engineer. “We have a different issue than some other companies,” says Hilbert, noting that its sand casting process uses less lead than die-casting used by other companies.

Second, the company requests that its component suppliers provide test results. The carburetors it uses, for example, have been shown to contain only about 100 ppm of lead in their Zinc bodies.

Finally, Cobra shields any parts that may contain excessive amounts of lead, such as valve stems, and the parts that it cannot shield it has replaced with parts of a different material. The shielding on Cobra machines has added about $10 to the cost of each machine.

Cobra is able to comply, at least in part, because its components cost more and it produces fewer units than some other OEMs.

How, you may ask, does Cobra get around the infamous “Any” clauses in the law? The ones that say kids can’t ingest any lead and the products can’t have any other adverse impact on public health or safety?

Simple. Cobra hasn’t yet had to ask for an exclusion under the law, which is what the March 13, 2009, so-called exclusion rule was all about. It spelled out the requirements to be granted an exclusion under the law if a product contains more than 600 ppm.

Nothing meets the “any” restriction, argues Hilbert, not a breath of air, not a drink of water. “The CPSC has said that it can’t grant any exclusions, given the way the law is written,” he says.

Working With The Government

Meeting the letter of the CPSIA hasn’t been easy for Cobra. Hilbert figures he’s been working fulltime on this project for six weeks, since the ban was put into place. Doing that means that he has to ignore his other duties as CEO, and he has to spend lots of money. His first roundtrip ticket to Washington cost $1,300, for example.

Hilbert has been working closely with Michigan elected officials to produce a resolution that recommends that the federal government excludes powersports equipment from the law. At the same time, he’s been working with the Michigan congressional delegation to get them educated about the issues involved. He’s also been very involved with the AMA and the MIC and their efforts on this issue.

Hilbert still would like an exclusion for Cobra, given the cost of testing and the fact that lead limits will drop to 90 ppm in about two years.

By working with his suppliers and minimizing the amount spent on outside testing, Cobra can continue selling products that comply under CPSIA while others have pulled back. “Honestly, I don’t think a lot of other companies are doing that now,” says Hilbert. “But this is our whole business, and we’ve got to be aggressive with it.”  JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com.

Advertisements

Tags: , , , , , , , , , , , , , , , ,

4 Responses to “Cobra Sells Kid’s Bikes Despite CPSC Ban”

  1. Kid's Dirt Bikes Banned-Literally - Page 3 - TDR Roundtable Says:

    […] blame Bush as it all collapses around us all… Sorry I must have been mistaken….NOT… Cobra Sells Kid’s Bikes Despite CPSC Ban Dealernews Blog If a manufacter passes said lead tests they can sell their machines, most manufacters do not want […]

  2. Topics about Motorcycles » Cobra Sells Kid’s Bikes Despite CPSC Ban Says:

    […] Travel Guide Articles added an interesting post on Cobra Sells Kidâ […]

  3. Sarah Flinchum Says:

    My son rides a Cobra and he loves it, we are very happy with it the bike and the service we get from the Cobra Plant and M3 Motorsports, our dealership.

  4. DoubleD AKA "Saskwash" Says:

    If this article is true then why is Cobra going through so much effort to change the law? If they have tested and certified the contents of their suppliers, then what is their worry? I suspect its all those parts from China and they really need to change the law to maintain the ability to sell their product. This is not an american made bike as they falsely advertise that fact and now they are misleading the public into thinking their products are tested. If their products were tested and confirmed, they would promote that and dedicate money towards that effort rather then wasting time to change a congressional act.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: