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Western Digital downplays impact of drive recall Company says it chose to take leadership stance rather than ignore flaw when it issued notice
By Owen Ferguson
About 400,000 of drives were shipped out, while 600,000 remain at the factory. Charles Hulet, director of sales with Western Digital Canada Corp., stresses that even without a recall, the number of failures would have been small. "We try to simulate three years in a very short period of time to see if something's going to happen," he says of Western Digital's testing procedures. "(After ) anywhere from six to 12 months, drives built with this chip would have an increased failure rate. If normally we would anticipate it to be around one per cent, it would go as high as five per cent." Even so, Western Digital decided to make the recall. "We're taking a leadership stance here. There are problems with hard drives every day," says Hulet. "Most of the time people shut up and they don't do anything about it. We just feel that's not the way to go." Despite Western Digital's openness about the product flaw, many in the industry remain wary. Peter Deniz, vice-president and general manager of Bell Microproducts in Richmond Hill, Ont., which distributed Western Digital drives until recently, says he finds the recall somewhat worrying. "If I were continuing to engage with Western Digital, I would be very very reluctant to take any of that product," he says, "My concern would be: 'How do I know what product I'm getting?'" Deniz says the recall bodes ill not just for distributor relations with Western Digital, but for the company as a whole. The situation, he says, "will become a significant financial burden for Western Digital, because their financial health has been challenged in the last little while, as has that of a number of disk drive manufacturers, and I would be concerned about what this would do to them." The financial implications for Western Digital may not be as drastic as anticipated, however. The faulty chip is located on the outside of the drive, which makes it fairly easy to replace. Hulet says Western Digital is already on its way towards rebuilding the recalled drives. But financial loss is not the only potential fallout from the recall. Loss of confidence in the product is also a worry. Robert Katzive, an analyst with Disk/Trend Inc. of Mountain View, Calif., says the recall will have a slightly negative effect on user confidence in Western Digital products, but that the brunt of customer discord will be borne by system builders. "Remember that most people buy computers with drives already installed and selected by the system maker so most people don't really have any idea which drive is in their system and probably don't care, as long as it works properly." Katzive says Western Digital acted with due haste in issuing the recall. "I think they did the responsible thing," he says. "I think they caught the problem before it started to cause a significant number of problems in the field." But Katzive also wonders how the recall will affect Western Digital's reputation. "It won't do it any good, of course," he says. "If you happen to be in the computer manufacturing business, it's a bit of a pain because it puts, in some cases, a strain on your service operations, which costs money. "The number of drives is not so large that it should be a completely onerous burden for the system makers, particularly the larger ones, which are pretty well organized, to handle that sort of thing anyway. Some of the smaller integrators might find it a bit more problematic." But, even with the headaches that the recall has caused, Hulet remains optimistic. "We're in our first fiscal month for this quarter, fiscal October, and we expect to start shipping drives in a couple of weeks," he says. As for the 400,000 drives headed back to the factory, he says, "Given we build five million drives a quarter, it's not a very large number."
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