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Chinese Drywall Situation in Fl

Essay by   •  April 10, 2011  •  Essay  •  454 Words (2 Pages)  •  2,113 Views

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Article #1: Local

Pagliery, J. (2010, June 9). Homeowner frustrations over Chinese drywall shift to suppliers. Daily Business Review. Retrieved June 9, 2010, from


The case intends to shift part of the focus from the Chinese manufacturer of the tainted drywall to the local distributor, Banner Supply, in Florida which imported the drywall for resale. The case seeks to explore what kind of legal, ethical, social and environmental responsibilities do these businesses in the supply chain have, especially when the manufacturer disowns responsibility and/or it is not feasible to hold the manufacturer accountable for various reasons. The litigation particularly sheds light on Banner Supply's dubious settlement with the manufacturer to protect its own business interests, whereas, the homeowners are left to deal with the problem by themselves, some of them not even aware of the potential dangers.

Stakeholder Analysis:

Homeowners(Plaintiff): Homeowners are exposed to a serious health risk and face dire financial situation of their house losing value.

Banner Supply (Defendant/Miami based supplier of Chinese drywall): Seeks profit from reselling drywall, Faces risk of losing litigation and being penalized.

Homebuilders: Face risk of unsold inventory in developments where tainted drywall is used, brings bad reputation, targets of further lawsuits.

Contractors: Face health risk of being exposed to the affected drywall during construction.

Knauf Plasterboard Tianjin (Manufacturer & International Supplier): Face risk of lawsuits, earning bad reputation

Creditors: Eventually, the loss of intrinsic value of the affected properties could trickle down to the creditors who financed the deals for homeowners and/or developers.

Community/Neighborhood/City: Environmental/Health concerns for the neighborhood and drop in prices and tax revenue.

Personal Opinion:

In a typical product liability case, e.g., car manufacturer, the manufacturer usually takes up the liability for other companies in the supply chain. But in this case, that possibility is really dim keeping in mind the jurisdictional complications. Under such circumstances, that responsibility along with the responsibility to engage with consumers about the defects and potential dangers identified with the product falls on the suppliers, contractors and the homebuilders. Banner Supply should have been proactive in letting the contractors/homebuilders/homeowners know about the defects associated and work out a plan to



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