 Exxon Buys A Federal Pacific Electric Stab-Lok® Panel Scandal Along With A Company
Business Week, July 21, 1980, p.66
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Replacement FPE Stab-Lok® circuit breakers are unlikely to reduce the failure risk of this equipment. We recommend that residential FPE Stab-Lok® electrical panels be replaced entirely or the entire panel bus assembly be replaced, regardless of FPE model number or FPE year of manufacture. We do not sell circuit breakers nor any other products.
This document provides a piece of the historical background of the Federal Pacific Stab-Lok® Electric Panel hazard.
The Exxon Corporation came to own Federal Pacific, recognized the liability and issues involved, and divested itself of ownership of
Federal Pacific.
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Exxon Buys A Federal Pacific Electric Stab-Lok® Panel Scandal Along With A Company
For faster loading, this article, obtained from a public library, has been broken into segments. Use the links below to read the article in order; use the "back" button on your browser to return to this page.
Exxon FPE Scandal - entire article [PDF file]
At each link to the four parts of this news article we print excerpts from key contents of the report:
- Exxon FPE Scandal, part 1 Exxon purchased Reliance Electric for $1.2 billion then discovers a charge that as many as 10% of homes built in recent decades have defective electrical equipment produced by Reliance Electric's (purchased) subsidiary, the Federal Pacific Electric Company. Lawsuit filed 26 June 1980 charges the Federal Pacific Electric Company of having employed "materially deceptive and improper manufacturing, testing, and certification practices" in production of one of the nation's most widely-used circuit breakers [the FPE Stab-Lok® circuit breaker]
- Exxon FPE Scandal, part 2 Exxon asked the court to rescind the purchase of Reliance or repay the $345. million purchase price plus damages; A week later Reliance notified the US CPSC that its own in-house testing of FPE Stab-Lok® circuit breakers showed failure [to trip, especially on the 2-pole units] at "relatively low overcurrent conditions" and the company stopped shipment and sales of the product. The principal defendant in the case is UV Industries [a company liquidator who had purchased Federal Pacific Electric and then re-sold it to Reliance, then liquidated itself a year before this suit over the objections of its major stockholder, Sharon Steel Corp]. UV's chairman Martin Horowitz denied knowing anything about the Federal Pacific Electric Stab-Lok® problem.
- Exxon FPE Scandal, part 3 The CPSC had not yet been told the details of the deceptive practices. A CPSC staff member who once worked at UL (Underwriters Laboratories) suggests that the practices may have involved rigging equipment at Federal Pacific's own test facilities in a manner that would deceive the UL on-site inspectors. [Details of the relationship between UL and FPE were proprietary.] Reliance's statements indicated that Federal Pacific Electric's products were de-listed [for several years] after failing various tests.
- Exxon FPE Scandal, part 4 The removal of UL's listing for FPE Stab-Lok® circuit breakers occurred after UL changed its test procedures following CPSC concerns that the breakers might pose fire hazards. UL's de-listing of nearly 400 circuit breaker labels started the legal process. By May 1980 it became obvious that the real problem was "deception" that occurred over a long period of years. Reliance suspended without pay Federal Pacific Electric President Harry E. Knudson, Jr. (Watchung, N.J.) and four other key Federal Pacific Electric executives.
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