Greed is Good

Corporate giant GE’s plastics division “nothing more than a confidence scam,” a lawsuit alleges.

Eemax Inc., an Oxford-based company that did business with General Electric, claims the corporation’s plastics division is “nothing more than a confidence scam that has caused immeasurable losses,” according to a complaint filed last month in U.S. District Court in Hartford.Fairfield-based GE recommended Noryl, a plastic resin, to Eemax for it to use in the construction of water heaters. Eemax manufactures instantaneous water heaters for commercial and residential uses, according to its web site. Its water heaters utilize electric, tankless technology, which the company says eliminates the burden of storing and heating water common in standard tank models . However, the resin was completely unsuitable for hot water use, a fact GE was well aware of when it made the recommendation to Eemax, the lawsuit contends. Despite this knowledge, GE sales personnel created a false impression with Eemax that Noryl could work for them.GE “had a corporate policy that ‘greed is good,’” the lawsuit alleges. “In addition, the employees in the marketing department of [GE] were instructed that ‘their job is not to sell the customer a product that works’ but rather ‘to get their foot in the door’ and then move the client horizontally or vertically into different product lines.“GE Executive Director for Communications Gary Sheffer did not return a call for comment. Eemax approached GE’s plastics division for help with a number of business services, the lawsuit says, which was filed on behalf of the manufacturer by attorney Mark Block of the Norwich-based firm O’Brien, Shafner, Stuart, Kelly and Morris. The corporation was to provide Eemax all the technical support to design, build and manufacture parts and tooling, test working prototypes, evaluate toolmakers, and provide a suitable plastic resin.But GE’s own internal testing on Noryl showed that it was not suitable for hot water use, the lawsuit says, and knew of its failure in other plumbing applications from other customer complaints, of which GE learned in prior litigation. Still, GE never told Eemax. Had they done so, Eemax never would have purchased the resin, the company contends.The lawsuit is silent as to when Eemax first purchased the resin, and how long it took them to complain. Attorney Block did not return a call for comment.