Epic Kayaks has filed a lawsuit against a manufacturing facility in China that refuses to give Epic Kayaks its manufacturing molds for boats and paddles.
The dispute between Epic Kayaks and Flying Eagle, a manufacturer based in Fuyang, China, began in July 2008, when Epic began looking to set up shop in another facility in China. Greg Barton, co-owner of Epic Kayaks, said there was an agreement in principle to end their business dealings, but four months later things went sour.
"We notified our manufacturer that we were moving to another facility. They agreed that we could take all the things that belong to us. But they started to insist on hugely inflated fees and other restrictions," Barton told SNEWS®.
Flying Eagle refused to return product molds, and Epic filed a lawsuit in an intermediate level court in Hangzhou. Barton said the big question is whether an American company can succeed in a Chinese court.
"I don't know how much of a fair shake we'll get in China," Barton told SNEWS. "I think we have a very strong case, and any judge who looks at it with any sort of objective viewpoint will agree we're in the right, and they should turn over our things to us. Our concern is whether there will be any sort of bias because we're a foreign company."
Barton told SC Biz magazine, "It's definitely going to have a significant impact on our cash flow and hurt us quite a bit. It's already hurt us for several months."
However, Barton told SNEWS that Epic is "sitting pretty well" and has a decent inventory of boats in its Charleston, S.C., facility, and other parts of the world to fulfill orders.
Plus, Epic managed to move most of its paddle molds from the Flying Eagle facility, and it has started to rebuild other paddle molds still being held. "We're hoping we'll still be able to secure the release of our possessions, but in a worst case scenario we'll have to rebuild them," Barton said, noting that Flying Eagle has not turned over several boat molds.
In the meantime, Epic has moved its China manufacturing to a new facility in Fuyang, which it leased three months ago to produce paddles and boats. Still, this episode has made Barton think harder about the costs and benefits on manufacturing in China. "It certainly makes us realize there are big risks going there," he said, adding that he has looked at the option of manufacturing in other parts of the world.