Down is spending much of this week being interviewed by magazines, newspapers and trade websites. He wants to draw a line under the events of September 2004 and highlight all that Kryptonite has done to placate dealers, distributors and consumers around the world.
BikeBiz.com spoke with Down earlier today.
With hindsight, what, if anything, would you have done different in the first couple of days of the storm?
"No doubt we’ll look back and see different ways of dealing with the issue. At the time we wanted to address concerns via our website and via the trade media. We took it very seriously but had to analyse the situation, see what products were affected, and prepare an adequate response. This all takes time. We have been accused of reacting slowly. I have looked at the timeline, we weren’t slow to respond. But in an age of cellphones and the internet people assume things have to be done instantly. We had problems of logistics and manufacturing to get around."
Why didn’t a Kryptonite representative register on bikeforums.net and enter company-approved statements?
"We felt we needed to communicate via our own website. We resisted going on the message board [that started the debate] because we would have had difficulty with [human] resources. The rules of engagement are very different now. Journalists check their stories and have to be accurate. It’s not like that on bulletin boards and blog sites. We didn’t want to manipulate the message and didn’t want to get dragged into replying to each and every posting."
What back-up did parent company Ingersoll Rand offer, if any?
"Having Ingersoll Rand behind us was a huge help. They identified people who could help us, helped us with crisis management and customer service issues. We had phone system overload and an incredible number of hits on our website. Ingersoll Rand helped significantly, but the weight of the problem fell on Canton. The team here was fantastic."
Why did this blow big in the US but relatively small in the UK, and almost insignificant in mainland Europe? The web’s global isn’t it?
"The US and Canada are our biggest markets. We are the market leader. In other areas of the world we’re not viewed as the leader. So, there was more noise from the US and Canada. However, our replacement programme was international. We were very concerned not to disadvantage any dealer, distributor or consumer, whatever their location."
What do you plan to do with the locks sent back to you? At one point, you joked Kryptonite might commission a swords-into-ploughshares sculpture?
"It was difficult to gauge volumes of locks that would be returned. There are large volumes from consumers and from the supply chain. Time and logistics restraints mean we’ll recycle the locks. We are well on the way to solving the world’s scrap steel shortage!"
Are there any ‘old’ locks out there? In the US, in the UK, rest of Europe, rest of world?
"In isolated cases, yes, there might be. But we have tried to communicate the replacement programme as widely as possible."
It’s obvious why the other lock companies didn’t raise their heads above the parapet, but if the roles had been reversed, do you think Kryptonite would have gone public on the issue or stayed just as quiet as the non-impacted companies?
"If you look at the history of Kryptonite when there have been issues with the product we’ve always tried to do the right thing. The best protection for our company is to look after the consumer first. But your question is a hypothetical one and it’s difficult to say what we would have done [had we not been directly implicated] but we will always try to do the right thing. Most of our competitors ducked down and got clean away, but what our competitors do [speaking ethically] is not our concern."
How many ‘a Bic was used to steal my bike’ claims is Kryptonite investigating?
"We’ve seen some increase, but not a huge leap. We’ll try to be as fair as we’ve always been. We’ll look at every case on its merits."
When the Bikebiz.com story about the 1992 Bic revelations ran, how much of a surprise was this? Was there zero corporate recollection of the 1992 articles?
"We weren’t aware of it in management. The company has been bought and sold since then, with new people in place. The [John Stuart Clark article from 1992] was a really good, balanced article. It showed that if thieves are determined, and have time, they can get into anything. It didn’t talk about Kryptonite. The piece echoes the fact that a lock is there as a deterrent. We’d like everyone to buy our New York Fahgettaboudit locks but not everyone will make the decision to go for that level of security."
What stage are the US and Canadian group actions at?
"I can’t comment. Everything that can be said is on kryptonitesettlement.com which has just gone live."
Kryptonite has settled one of the class action claims launched against late last year. Some of the class actions cited the BikeBiz.com article regarding John Stuart Clark’s 1992 article about cylinder locks being cracked into by Bic pens.
Part of the injunctive relief of the settlement is for Kryptonite not to make or market cylinder type locks, something already in hand in September 2004. Kryptonite also agreed to publicise the settlement via ads in USA Today, certain Canadian newspapers, two US bicycle magazines and in a letter to consumers on its database and to bicycle stores.
Does the $10m cost of the Kryptonite vs Bic problem include the compensation claims on kryptonitesettlement.com?
"This is the best estimate of the overall cost at this time. Kryptonite will not know the full cost of the lock exchange programme until we have exchanged all of the locks for consumers that continue to sign up for this programme."
Does that settlement affect the other class action suits filed in the US? Will there be more settlements?
"We cannot comment on pending litigation."
How are Q4 2004 and Q1 2005 sales looking year on year?
"Sure, it impacted on quarter four of 2004, and on the first quarter of 2005. We’re still giving away product! Throughout all this our distributors have been fantastic. Our sales will recover. This has been a bump in the road, but we did the right thing, we’re back on track and the future looks very good."
If the original bikeforums.net poster hadn’t posted his views on the web but, instead, sent a video to you, would the same acceleration of new locks have taken place?
"We were in a pre-launch stage at the Eurobike show and just about to launch at Interbike. We had to switch manufacturing on. Had we been alerted to the problem during this phase we would have got new product out there as soon as possible. [The posting on bikeforums.net] made us do things quicker."
Do you think companies now look at the internet, and forums, in a new light?
"I’ve been told we’re now the poster child for blogging! Companies have to be very aware of the speed of what’s being said about them on bulletin boards. It’ll pay to monitor such mentions. Information can now move in a nanosecond. It’s frustrating that real-world logistics cannot move that fast. Journalists check their facts, come back to you to recheck stuff. Bloggers and forum posters don’t do that. Competitor companies could sign up anonymously and attack your brand, they can say what they like. What’s got us through all this is passion for the bike industry. This is our industry and we love it. It’s a cool industry, I get paid for going to bike shows. I’ve spent a lot of my career in security. Walking around a bike show is more exciting than looking at door knobs."
BIKEBIZ.COM BIC/LOCK ARTICLE INDEX
Monday 10th January 2005: Bic vs Kryptonite to be case-study in PR textbook
‘Cases in Public Relations Management’ will be published in the US by McGraw-Hill Publishing and is to feature the online brand mauling suffered by the Kryptonite Corp in Autumn 2004.
Tuesday 28th December: US distributor of OnGuard locks has a dig at Kryptonite
The European lock company has long known about the vulnerabilities of cylinder locks and has shunned their use. Todson, the lock brand’s US distributor, has today issued a press release that knocks Kryptonite, even though Kryptonite has voluntarily recalled the locks which could be opened with Bic pens.
Wednesday 17th November: Kryptonite, rejoice, it’s now Oxford Products taking the heat
The December edition of Ride, the British motorcycle magazine has an "exclusive investigation" on the Bic lock opening trick that’s been exercising minds in the bicycle trade since September. However, the four-page piece fingers tubular cylinder locks from Oxford Products rather than Kryptonite. "It’s possible some Kryptonite locks are affected," said the Google-averse writer of the article.
Wednesday 6th October: Kryptonite lock replacements to ship to public before dealers
That’s the consumer-focussed message being promoted from the busy Kryptonite booth at the Interbike trade show in Las Vegas. Kryptonite launched its recall programme after a US consumer posted a Quicktime movie to a forum, showing how tubular cylinder locks could be opened with Bic barrels. The exchange locks will ship from the beginning of next week via UPS, after being airfreighted from the Far East.
Saturday 2nd October: MasterLock stung into recall action
When Kryptonite’s Bic problems surfaced, Master Lock of the US issued a statement saying its top-end locks were immune to pen-attack. The fact the company also produced u-locks with cylinder tubular mechanisms was not majored on. Master Lock did not follow Kryptonite and launch a recall programme: until now, that is. News of this went on masterlock.com on Friday
Wednesday 29th September: Brand attack: how many ways can consumers tell you they’re unhappy?
At first, disbelief. Anger follows. Tort lawyers then smell blood and launch putative class actions. Is sarcasm the last stage or merely another point along the road? A US consumer has placed Kryptonite replacement keys on Ebay. They’re felt tip pens. "If you really bid on this, you missed the point of the auction, but I will still gladly take your money anyways," said russw19.
Friday 24th Sept: Bike bosses round on round-key lock makers
Gordon Fisher, MD of Fisher Outdoor Leisure, has told BikeBiz.com he and other bicycle trade execs were interviewed by newsreader John Humphries on BBC Radio 4 on 3rd December 1992. The subject matter? Bike locks which could be opened with Bic pen barrels. Prices for locks secured with ACE mechanisms dropped overnight, indicating the Bic method was well known at the time. Nigel Moore, MD of Moore Large, said: "It does our industry no good if the public are ripped off."
Monday 20th Sept: Bikeforums.net hit by upsurge in Bic-fondling visitors
As of late Sunday night, the Kryptonite vs Bic posting on Bikeforums.net had been read 340 000 times, and the movies, hosted elsewhere, downloaded by half a million unique users. Forum owner Joe Gardner, who holds down a full-time job and runs the site in his spare time, is now out of pocket because he had to lease extra gigabytes of server space to cope with the rush on his site following reports on CNN.com, Wired.com, 370+ news-sites, and a front page splash in the New York Times.
Wednesday 22nd Sept: Cycling attorney files class action against Kryptonite
The class action has been filed at the San Diego Superior Court Case, California. Despite the fact many lock manufacturers supply security products which can be opened with deformable plastic tubes – such as Bic pen barrels – it’s only Kryptonite mentioned in the class action. Attorney firm Estey-Bomberger bases its action on Kryptonite’s failure to change from tubular cylinder mechanisms after the Bic-opening method was first publicised in a British bicycle magazine in 1992. BikeBiz.com is cited as a source of evidence in the class action.
Wednesday 22nd September: Kryptonite does not win ‘dilution’ case against DC Comics, owner of Superman brand
Ingersoll-Rand’s Kryptonite execs are probably seeing more lawyers than they like right now. On top of the Bic wrangle, DC Comics has come out best in the first stage of a long-running dispute over the use of the name usually associated with Superman.
Thursday 23rd September: Kryptonite changes tack; offers free product exchanges
Last week, Kryptonite came out with a caveat-heavy crossbar upgrade programme. This has now been scrapped. Now, owners of Kryptonite tubular cylinder locks – the ones that can be opened with Bic pens – can hand in their locks in an amnesty programme that will see them walk away with free locks. No other supplier of locks using ACE cylinders have announced any sort of exhange programme.
Friday 24th September: $200m locks lawsuit launched against Kryptonite and others
A class action against Kryptonite was filed in California earlier this week. Now, a Canadian lawyer has launched a lawsuit to help gain compensation for "hundreds of thousands" of bicycle lock owners. Significantly, Sack Goldblatt Mitchell of Toronto names not just Kryptonite in the suit but Norco and Bike Guard, too. The company says it will also add "bicycle retailers" to the list.
Saturday 18th September: Kryptonite was not too slow to respond to consumer attacks, says Tocci
Donna Tocci is getting lots of media name-checks at the moment. She’s the Kryptonite spokeswoman quoted in hundreds of news-site articles syndicated across the US and beyond. She believes Kryptonite has acted as swiftly as it could, given the circumstances.
Thursday 16th September: Write it down to experience, Kryptonite to offer lock upgrades
Sheath those Bics, Kryptonite is to offer owners of Evolution and KryptoLok locks the ability to upgrade their crossbars to the new disc-style cylinder. The mechanism for this has yet to be worked out, says the company.
Thursday 16th September: The pen is mightier than the….u-lock
In a bizarre case of coincidental product syncronicity, the plastic barrel of a certain type of biro can easily open a certain type of tubular cylinder locking mechanism, popular on u-locks. This was first described in a British bicycle magazine in 1992 but the issue then disappeared from public view. But, in a powerful demonstration of how quick and cruel the internet can be, an American cyclist has rediscovered the Bic-pick and posted a Quicktime movie to a bike bulletin board, showing a Kryptonite lock being popped open in seconds. Kryptonite has responded, but slowly…