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Deadline Looms for Removing Lead From Europe-Bound Products

Posted on: Saturday, 20 August 2005, 00:00 CDT

Aug. 20--Many small manufacturers in the United States are in danger of missing a deadline to remove lead and other hazardous substances from electronic products sold in Europe.

The European Union has set July 1, 2006, as the deadline for compliance with the lead-free regulations. Some industry experts have begun sounding the alarm for electronics companies and their suppliers to get serious about meeting the deadline.

"The concern we have is there a lot of companies that don't see it coming," said John Donovan, president of the Alliance of Service Providers & Manufacturers. "This is a big elephant. It's coming right at the American manufacturer. Based on input from many sources, we are guessing 40 percent or more of the manufacturing industry doesn't get it."

The Palo Alto law firm Wilson Sonsini Goodrich and Rosati was concerned enough about the problem that it issued an eight-page alert to its clients about the requirements, both for lead-free products and another law related to recycling.

Donovan's association is holding a seminar on the topic Oct. 18 at Wilson Sonsini's Palo Alto headquarters. The problem isn't so much with the big companies. Intel, for instance, has begun shipping lead-free products, and it plans to ship millions of lead-free microprocessors for desktops and laptops this year. That's a small part of the tens of millions of chips that Intel ships, but it expects to meet the deadline.

Complying isn't easy. Hitachi Computer Products America took 18 months and finally started shipping its first lead-free storage devices this spring, said Larry Harvey, Hitachi's director of design engineering in Norman, Okla. The Japanese parent company had to monitor compliance for hundreds of products and thousands of suppliers to meet the deadline.

"It's a very expensive and painful process," Harvey said.

The European Community's directive controls six substances: lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls, and polybrominated diphenyl ethers. These chemicals can comprise no more than 0.1 percent of overall weight of a product.

Lead is used in solders that attach electronic components to circuit boards. Manufacturers have found that different combinations of tin, copper and silver can serve as replacements for the solder.

The law and its requirements aren't well known among small manufacturers, who are often suppliers to the big companies, said Bijan Dastmalchi, president of Symphony Consulting, a supply chain and logistics consultancy in Sunnyvale. One critical mistake that can affect big companies is that they have to be sure to secure multiple sources of supply in case shortages develop for the compliant materials.

"We've been getting calls from companies that are confused and worried, as they should be at this point," said Mike Kirschner, president of Design Chain Associates in San Francisco.

Kirschner estimates that it costs $200,000 to $1 million to make a product compliant. He thinks it's so complex to redesign a product line, find alternative materials, implement the change in manufacturing, and monitor compliance that many companies won't be able to do it all in the 11 months before the deadline.

Overall, thousands of manufacturers will spend billions of dollars on compliance, experts say. The regulations have led to a boom for consultants who can help with getting rid of the hazardous substances.

"I'm getting calls about this every day," says Dastmalchi, who provides consulting services as well as workshops on the topic.

The European Union issued the directive in January 2003, and it applies to any company that ships equipment into an EU member state. Companies should not expect the EU to extend the 2006 deadline, Harvey said. The legislation is being adopted elsewhere, so compliance on a worldwide level seems inevitable.

China is adopting similar regulations. California will require manufacturers to comply with whatever Europe requires, six months after the European deadline passes. Japan is moving in the same direction, and even some countries in South America have begun discussing it.

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Source: San Jose Mercury News

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