Mattel Apologizes To China For Toy Recalls

Company Says Design Flaws, Not Chinese Manufacturing, To Blame For "Vast Majority" Of Recalls

(AP)  Mattel Inc. tried to save face Friday with Chinese officials, taking the blame for the recent recalls of millions of Chinese-made toys as it strives to mend a strained relationship with the nation that makes most of its toys and fattens its profit.

The world's largest toy maker sent a top executive to personally apologize to China's product safety chief, Li Changjang, as reporters and company lawyers looked on.

"Mattel takes full responsibility for these recalls and apologizes personally to you, the Chinese people, and all of our customers who received the toys," Thomas A. Debrowski, Mattel's executive vice president for worldwide operations, told Li.

The unusual move reflects how invested El Segundo-based Mattel has become in China.

"Mattel certainly must have been facing some pressure to do that, because you can't imagine why they would be trying to push this story along any further," said Eric Johnson, a professor of operations management at Tuck School of Business at Dartmouth College.

He suggested Mattel may want to prevent China from imposing more taxes or regulations.

"China's embarrassment in all this could lead to that, and I think they were trying to head that off with this apology," Johnson said.

Peter Navarro, a business professor at the University of California, Irvine, and the author of "The Coming China Wars," also suggested Mattel was trying to avoid punitive measures.

"Mattel is worried that the Chinese government is going to make it difficult for them to produce, put their costs up and hurt their stock price," Navarro said.

Mattel did not immediately respond to a call seeking further comment.

Company stock has fallen from the mid-$23 level following the first recall in early August to a low of $20.97 on Sept. 10. Shares have since rebounded, increasing 38 cents, or 1.6 percent, to $23.94 on Friday.

The apology came ahead of an expected visit to China by Mattel's Chairman and Chief Executive Robert A. Eckert. The timing of the trip has not been announced.

Mattel ordered three high-profile recalls this summer involving more than 21 million Chinese-made toys, including Barbie doll accessories and toy cars because of concerns about lead paint or tiny magnets that could be swallowed.

Mattel previously said many of the toys were recalled because of design problems. It also said certain vendors in China or their subcontractors violated Mattel's rules by failing to use safe paint or to run tests on paint.

On Friday, Debrowski acknowledged that the "vast majority of those products that were recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in China's manufacturers."

Lead-tainted toys accounted for only a small percentage of all toys recalled, he added.

In a statement issued later, Mattel said its lead-related recalls were "overly inclusive, including toys that may not have had lead in paint in excess of the U.S. standards."

"The follow-up inspections also confirmed that part of the recalled toys complied with the U.S. standards," the statement said, without giving specific figures.

In Beijing, Debrowski said, "we understand and appreciate deeply the issues that this has caused for the reputation of Chinese manufacturers."

Li upbraided Mattel for maintaining weak safety controls and reminded Debrowski that "a large part of your annual profit ... comes from your factories in China."

"I really hope that Mattel can learn lessons and gain experience from these incidents," Li said, adding that Mattel should "improve their control measures."

Since the recalls, Mattel has announced plans to upgrade its safety system by certifying suppliers and increasing the frequency of random, unannounced inspections. It has fired several manufacturers.

Chinese food, drugs and other products ranging from toothpaste to seafood are also under intense scrutiny because they have been found to contain potentially deadly substances.

On Friday, the Consumer Product Safety Commission said about 1 million Simplicity and Graco cribs were being recalled after three children became entrapped in their cribs and died of suffocation. The products were made in China.

China has bristled at what it claims is a campaign to discredit its reputation as an exporter. It accuses foreign media and others of playing up its product safety issues as a form of protectionism and has stepped up inspections of food, drugs and other products in response to the concerns.

Manufacturing toys in China has helped Mattel and other U.S. companies lower manufacturing and labor costs, helping boost profits.

Mattel established a presence in China 25 years ago and now makes about 65 percent of its products there. More than 80 percent of all toys sold in the U.S. are made in the Asian nation.

Mattel's apology garnered praise from some parents, including Arianna McRoberts, 41, of Los Angeles, the mother of two boys, 7 and 14.

"It's unfortunate China got the bad rap, but I also think China needs to pay attention a little more carefully to their standards so they comply with American standards," McRoberts said.

Johnson said the staging of Mattel's apology as a public event was telling.

"This was all about saving face, which is very important in the Chinese culture," he said.

The mea culpa could help reshape the debate surrounding Chinese-made toys.

New research from two business professors shows that recalls due to problems with the designs of U.S.-based companies accounted for about 76 percent of the 550 U.S. toy recalls since 1988.

The report was released earlier this month by Paul R. Beamish, an international business professor at Canada's University of Western Ontario, and Hari Bapuji, business professor at University of Manitoba's I.H. Asper School of Business in Winnipeg, Canada.

It found that recalls blamed on design problems and manufacturing defects, such as lead paint or poor craftmanship, both rose in the past two years as U.S. makers have shifted more of their production to China.

But they noted that, "if shifting manufacturing to China resulted in poorer quality goods, then the number of toys recalled due to manufacturing should be greater than the number recalled due to design."

The report said that was not the case.

"Nobody gets a free ride on this," said Beamish, arguing that toy makers' obsession to quickly get new products to market before they are widely copied has resulted in a lot of cost-cutting and inadequate testing.

[lastdance2]

Mattel - Is not - Apologizing To China
Mattel - Is - Apologizing to the - Bush Family

The Uncle of Pres. Bush
Prescott Bush
Chairman, U.S.-China Chamber of Commerce;

U.S.-China Chamber of Commerce - The membership roster includes United Airlines,
American Express, McDonald''s, Ford and Arthur Andersen,
the Beleaguered company that audited Enron''s books.

These companies that do business in China - Have got to be paying some form of tribute
to Prescott Bush.

Any person - Who enjoys - $9.00 a month - Slave Labor - Who also Allows -
Lead Painted Toys - Defective Merchandise - Tainted and Poisoned Food Stuffs -
To be shipped to the US. - Intended for use and consumption by the American consumer.

Knowing all the while - The Ratifications - of Poisoned Food - Lead Poisoning and
potentially Defective and Hazardous products. Knowing this -
Yet - Continues to Allow those imports.

Needs to be : Held personally Responsible and Criminally charged and Prosecuted
Perhaps this is why - Pres. Bush - Will allow only one (1) Inspector at each port of entry.

Prescott Bush connections to an American firm, Asset Management, came into question
in 1989, The company was the Only U.S. firm able to - Skirt - U.S. sanctions
and import (smuggle) Communications (Spy ??) Satellites into China.

Lastdance

[sevenveils]

Ok Mattel,
Where is your apology to the American consumer?
These are the people most harmed by your lack if quality control and absoluter horrible designs that proved not just hazardous, but fatal even, to some of your users. Only the tobacco companies have killed more of their customers than the toy industry.

It''s about time Mattel and other toy manufacturers put quality and safety before profit.

[lochlan-2009]

Ha... ha... Matel, bow down to your new leader, the Chinese government. Now apologize, grovel...
This country is crumbling.

[edamos54]

It''s pretty sad that all the jobs that were ours have
been taken to China. You would think that the prices
of this merchandise would drop since the cost of man-
ufacture has dropped. Profit - profit - profit. And
the morons who run these companies /Mattel, Fisher -
Price/ don''t even have the brains to insect this stuff
before it gets to American toy shelves. They''re not
sorry about the sub-standard products, they''re sorry
they have been exposed. These people are un-American
greed mongers who could care less about our children.
They only care about their bottom line. You guys had
better button your shirts before your hearts fall out.
Go and apologize to the Chinese - how about getting our jobs back home where they belong? Your products
should be boycotted and you crooks should be locked up.

[alphaa10-2009]

Mattel wants to apologize the PRC? That shows us what incredible profit margins China has given US firms which basically fired all their US employees and offshored production to China.

Even "diabolical" is not the quite word for the Chinese hold on world manufacturing-- the same profit inducement the PRC offers US and other manufacturers to offshore to China (1) kills native industry and creates Chinese monopoly and (2) inevitably hastens the day when The World''s Wealthiest Communist Dictatorship will raise prices on all foreigners.

"Sorry about that," the PRC will say, "but we are your factory floor, and now, we own your economy, too."

Bush''s "vital US economy" has been floating on a sea of US Treasury notes held by China, buoyed by the housing bubble. Bush loved to talk about "tax and spend" Dems, but somehow didn''t grasp he had substituted "borrow and spend" as his fiscal policy.

[pjj66]

It''s all about the profit. U.S. needs to start thinking about our future. We let foreign countries buy land and businesses here in the U.S. We are not allowed to own land or a building in other countries. We can only lease. The same rules should be in the U.S. other countries can only lease land or building. Let''s make our own product here in U.S.A. Yes, It will cost more, but the American will buy these products. U.S. companies give American chance and jobs. Instead of sending our jobs overseas.

[closethippy1]

Mattel apologizes to China? L freaking O freaking L!!!
That shows what idiots corporate people can be. They are so full of themselves they really think the world wouldn''t survive without them.
Those arrogant b''tards.
I don''t know what it is in their s''hitty genetic make up that makes them overreact like three year-old toddlers who can''t get their way.
These people are born this way and should be watched out for. Look at the freaking mortgage crisis going out of whack!
Corporates are as short-sighted as they come. They''re blinded by their huge egoes and couldn''t care less who they run over just to make more money or make themselves look good for their freaking "promotion".
Mattel is a good example of how diseased these people are.

[mgpm-2009]

I urge people NOT to buy products made in China. They have human rights abuses that rival Saddam Hussein''s. Forced abortions, political dissidents forced into slave labor in jail to make those cheap products in wal mart, religious persecution---the list is long.

Show your displeasure at this poisoning of our children by NOT buying ANY goods from China.

[erasmus6]

"Mattel said its lead-related recalls were "overly inclusive, including toys that may not have had lead in paint in excess of the U.S. standards."

"...lead paint in excess of the U.S. standards."??????

So basically they are saying it is okay to have some lead paint in stuff??

There shouldn''t be ANY lead paint in ANYTHING!!!

Mattel should have some of their people in China overseeing how everything is made. So yes, they are at fault too. BUT China should still know better than to use LEAD paint!

If the U.S. allows some lead paint, China probably figured why not add a little more?

[brianbwb-2009]

"I hope Mattel can sell their toys in China, I know I''''ll never buy another Mattel product."
Posted by USAconsumer1

With 1.5 billion people, and an economy that will very soon dwarf the US, not to forget that they now own 1.5 trillion in US debt, China may very soon be able to tell the US to shove it, and they will not miss our purchases at all.

The US is joining the "third world", with a bankrupt economy, a disappearing middle class, and rampant government corruption.

Thank the globalization chicken hawks for this.

[nmsuip]

As well they should apologize. Mattel attempted to lay all the blame at the feet of Chinese manufacturing.

Who''s name is on the box? MATTEL

Who releases the product design specs? MATTEL

Who is responsible for all aspects of product quality? MATTEL

Who is responsible for the global supply chain, including crappy choices for subtier suppliers and lack of supervision? MATTEL

Like many in Corporate America, they figured that it''s fun, easy, & cheaper to offshore. But they failed to adequately consider the added costs incurred for integration and quality resulting from a more complex & decentralized production system. Time will tell if other U.S. corporations get similar lessons from the school of hard knocks.

And while we''re at it, let''s cut through the branding BS. This isn''t the Mattel we grew up with. Same with other companies such as Levi''s or Boeing (just to name a couple). They love to wave the flag and wheel out the proud American heritage when it''s convenient. But the reality is that they outsourced the heritage along with the work. You don''t know what you''re getting or where it came from.

[tlonghorn01]

Mattel should stand behind its comments about CHINA people did it. You can only control the process if its made in USA with pride. Its time to bring the process back to MADE IN USA WITH PRIDE. The people will support the companies that do. It just takes the CEO with guts like SNAPPER mower did. He said fire him if you dont like the MADE IN USA. He is still in business.

[worried99]

It''s called ''having a yellow streak up your back''. I hope Mattel can sell their toys in China, I know I''ll never buy another Mattel product.

[armandbeni]

Mattel executives testified just last week before Congress and this doesn''t square with their testimony. They said that Chinese suppliers did not produce the toys to specification. Now which is it Mattel...or do you just say whatever you have to continue making huge profits on cheap toys.

[jimbosouth]

Don''t confuse facts with opinion, km449. Mattel screwed up-Chinese mfr.s screwed up. This administration did not-repeat NOT-make this stuff and send it in here. One has nothging to do with the other. Get a life.

[ez-one]

I hope that Matel gets its *** sued off and also any other company that is so greedy as to look mainly at the profit involved and not the product. They chose to do business with china, so they are responsable for the products that they import. Maybe we should start fineing compainies that bring this type of garbage into the country and dump it on us. Like $10 per item, then the money could be used to fix some of the other *** that this admin has created