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Cashing in on Chinese Drywall Inferiority Takes Research

May 3, 2010
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Angela D. Harris

The sting of inferior products is not uncommon. Ever purchased cheap windshield wipers in an emergency replacement situation? They don’t cost much, and they get the purchaser through that desperate need, but ultimately the cheapos fail and the purchaser pays the price.

Folks in many Southern states understand this analogy all too well. After living through the tragedy of multiple massive and intense tropical storms, people in the affected areas scrambled to rebuild once the debris had been cleared. In this rush, drywall supplies were quickly depleted and inferior substitutes were allowed into the country and filtered through to the local home improvement supply houses.

Between 2003 and 2008, it is impossible to know exactly how many homes were built or renovated using inferior Chinese drywall. Homeowners have been intermittently complaining for some time, but many assumed these complaints were isolated incidents that were not a direct result of defective drywall. After multiple complaints garnered the attention of local officials, it has since taken just under a year for the U.S. Consumer Products Safety Commission (CPSC) to complete its initial investigation. The verdict is that inferior drywall products were used in homes and buildings across the United States. These inferior products have caused compromised IAQ and have corroded most metal structures in the homes, including the HVAC systems - especially their copper coils.

With this finding, the first lawsuit was won in a Virginia court and the only thing left to do according to the Department of Housing and Urban Development (HUD) is to replace everything - HVAC systems included.

OPPORTUNITY IS KNOCKING

Now that suspicions have been confirmed and the lawsuit cash flow has begun, it may be time for the local HVAC contractor to begin knocking on some new doors and cashing in on Chinese drywall inferiority.

According to the CPSC, there have been approximately 3,082 reports of inferior drywall issues stemming from 37 different states. The bulk of these have come from Florida, at 59 percent; Louisiana, at 20 percent; and Mississippi and Alabama, at 6 and 5 percent respectively.

This customer pool may not be large, but it is a new customer pool that didn’t exist a year ago that may now be growing in your service area. The CPSC reports that these customers will often complain of a rotten egg smell; numerous health concerns, including itchy eyes and skin; and consistently blackened and corroded metal components in their home leading to frequent replacements.

HANDLE WITH CARE

There is potentially some cash to be made from this situation, but don’t be too quick to jump on the silver lining bandwagon. Before beginning the quest for new profit, remember that many of these potential customers have been through an intensely emotional ordeal and that the government is watching. The Federal Trade Commission (FTC) has already issued a warning about “bogus tests and treatments,” advising that there is no quick fix. Other government agencies continue to issue information and stipulations regarding the classifying of a home as having defective drywall.

Not everyone complaining of the issues listed previously actually have defective drywall and as the testing continues, the CPSC has issued an interim set of guidelines for “Identification of Homes with Corrosion from Problem Drywall.” The first major step in this process is visual signs of corrosion, and the second is the identification of corroborating evidence.

As with any potentially new market, it would be advised to do some research. Trucking in, guns blazing, with a lot of hype might be an approach best avoided. Here is an opportunity to be the HVAC contractor hero. Try not to ruin it with a tacky cape. Be sure to follow the rules set forth by the government and don’t make the mistake of overpromising. Partnering with a licensed and reputable drywall installer could provide invaluable leads and potentially lifelong customers who view you as their IAQ knight in shining armor.

If you have any experience with this rising issue turning into a revenue stream, drop us a line as to what approach worked best in your situation. The rest might find it helpful to do some research at www.drywallresponse.gov.

Publication date: 05/03/2010
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