A. O. Smith Receives C-TPAT Tier III, Highest Security Status for Importing Companies

MILWAUKEE, May 22 /PRNewswire-FirstCall/ — The U. S. Customs and Border Protection has given A. O. Smith Corporation Customs-Trade Partnership Against Terrorism (C-TPAT) Tier III status, the highest status offered to an importing company.

C-TPAT Tier III is given to a limited number of companies that have comprehensive programs in place to secure their facilities and supply chain from terrorists, smuggling, and narcotics. A company must pass a thorough inspection by Customs and Border Protection and be recommended to C-TPAT Director Bradd Skinner to achieve Tier III status.

The Customs and Border Protection granted Tier III status to 17 companies in 2007. There are approximately 6,000 importing companies in the U. S.

“A. O. Smith was one of the first companies to voluntarily participate in the C-TPAT program when it began,” Paul W. Jones, chairman and chief executive officer of A. O. Smith Corporation. “We believe that maintaining secure operations worldwide is important to the safety of our employees and contributes to the success of our business.”

A. O. Smith’s U. S. and Mexican facilities were C-TPAT validated in May, July, and December 2007, an action that led the way to the company earning Tier III status. During the validation process, CBP representatives identified 36 best practices at the company. Among those best practices:

  — Top management at the corporation demonstrated its support of the
C-TPAT program and encouraged the formation of C-TPAT compliance teams
at all company facilities worldwide;
— The company provides all employees worldwide with copies of its Guiding
Principles to Ethical Conduct and requires employees to complete online
ethics training programs;
— Representatives from the company visit all business partners’
facilities periodically to audit their security practices. If issues
are found during the verification audits, the suppliers are required to
submit a written corrective action plan. A. O. Smith monitors
compliance with these plans and results attained;
— Members of A. O. Smith’s compliance group provide C-TPAT training to
suppliers during the company’s annual supplier summits;
— The company has a documented tractor, trailer, container inspection
process and trains its personnel in how to inspect incoming and
outgoing shipments;

In addition, all A. O. Smith facilities in Mexico have secure perimeters and procedures to inspect all vehicles and visitors who come to the plants.

“The CBP representatives found that all of our facilities had similar best practices when they conducted the validation audits in 2007,” Kathleen Neal, director-trade compliance for A. O. Smith, said. “Consistency counts when you are being considered for Tier III status.”

Tier III status will result in significantly fewer external agency inspections for A. O. Smith shipments crossing the border between Mexico and the U. S. as well as fewer external agency inspections of overseas shipments.

“In order to maintain our Tier III benefits, we must continue to maintain and improve our supply chain security practices,” Neal said.

A. O. Smith Corporation, with 2007 sales of $2.3 billion, is a global leader applying innovative technology and energy-efficient solutions to products marketed worldwide. The company is one of the world’s leading manufacturers of residential and commercial water heating equipment, offering a comprehensive product line featuring the best-known brands in North America and China. A. O. Smith is also one of the largest manufacturers of electric motors for residential and commercial applications in North America.

First Call Analyst:
FCMN Contact: [email protected]

Source: A. O. Smith Corporation

CONTACT: Media Inquiries, Mark A. Petrarca, +1-414-359-4100, or
Analyst-Investor Inquiries, Craig Watson, +1-414-359-4009, both of A. O. Smith

Web site: http://www.aosmith.com/