Largest maker of gas cans going out of business

What did in the maker of the ubiquitous red containers? A failure to heed the warning printed on them.

Jeff Horwich: The East and Midwest are cooling off a bit after highs topped 100 again over the weekend. It's been a hot early summer; there's a potential shortage coming up. Not water, not power -- gasoline containers. Blitz USA is the biggest maker of portable gas cans, and it's filing for Chapter 11. The Oklahoma-based company says it can no longer bear the costs of product liability.

Sally Herships has more.


Sally Herships: If you think your health insurance is pricey -- try buying a policy for product liability.

Nate Cade: The insurance kicks in at $5 million. $10 million, $20 million.

Those are just the deductibles. Nate Cade specializes in product liability law in Milwaukee, Wis. And he says once you use your insurance, the premiums go up. And if you're a company like Blitz USA and lose millions in a product liability case:

Cade: It's like putting chum in the water for sharks. Once there's one shark eating, other sharks will follow.

Blitz is facing 42 lawsuits -- most brought by the same three lawyers. Consumers have accused the company of making faulty cans that explode when used to pour gasoline onto fires.

Blitz says its cans carry warnings that say you should never use gasoline to start or accelerate a fire. The company did win a case in Texas but even that cost $2.5 million.

So Blitz says it's shutting its factory doors at the end of this month.

In New York, I'm Sally Herships for Marketplace.

About the author

Sally Herships is a regular contributor to Marketplace.

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