Archive for the ‘Mattel’ Category

Economic and Fiscal Reality Closing In On China

October 19, 2008

Unemployed worker Wang Wenming was angry at his boss for shutting down a massive Chinese factory this week that made toys for Mattel Inc., Hasbro Inc. and other American companies.

By Associated Press Writer William Foreman

But the assembly line worker was also furious at the United States.

“This financial crisis in America is going to kill us. It’s already taking food out of our mouths,” the 42-year-old laborer said Friday as he stood outside the shuttered Smart Union Group (Holdings) Ltd. factory in the southern city of Dongguan.

A vendor sell vegetables on a street in Chongqing in China's ...
A vendor sell vegetables on a street in Chongqing in China’s Sichuan province. China’s strong economy appeared to put the nation on the global high ground when the financial tsunami first struck last month, but as the storm continues to rage, that position is looking less sure.(AFP/File/Peter Parks)

The company, which has struggled as global growth has slowed in recent months, employed 7,000 people in mainland China and Hong Kong. It wasn’t immediately clear how many have lost their jobs.

Economic upheaval in the U.S. is already changing and shrinking China‘s vast manufacturing hub in the southern province of Guangdong, long regarded as the world’s factory floor. However, factory closures won’t just be a China problem — shoppers will feel the effect in malls and stores in the U.S. and Europe.

“When these companies go bust, the outcome is higher prices,” said Andy Xie, an independent economist in Shanghai. “Labor costs have gone up 70 to 100 percent in the last three or four years. But these guys have not been able to raise their prices because Toys “R” Us, Home Depot and Wal-Mart are saying no price increase. How is that possible?”

File photo shows construction workers passing high rise commercial ... 
Construction workers passing high rise commercial buildings in Beijing. China’s economic growth has slowed to 9 percent in the third quarter as global financial woes started taking a toll on the country’s staggering development the government has said.(AFP/File/Teh Eng Koon)

For years, there were too many factories competing to win bids from foreign buyers demanding prices that were often unrealistically low. The winners were American and European consumers, who enjoyed rock-bottom prices.

But many factories were scrimping on materials and stiffing their suppliers just to survive, Xie said. The financial crisis will be the final culling factor that forces many wobbly factories to go belly up and end an unsustainable situation, he added.

Already, China’s toy industry is hurting. The official Xinhua News Agency reported this week that 3,631 toy exporters — 52.7 percent of the industry’s enterprises — went out of business in 2008. The causes: higher production costs, wage increases for workers and the rising value of the yuan, the report said.

Nor is Christmas likely to make much difference. Big toy giants generally put in their Christmas orders months in advance so toys can be shipped to them in time.

Even before the financial crisis, China’s exports were dropping because of the slowdown in America and Europe. For the first time in three years, the growth rate for Chinese exports in the first quarter of 2008 declined, according to customs figures.

Chan Cheung-yau, chairman of toy and games subcommittee under the Chinese Manufacturers’ Association of Hong Kong, agreed that the outlook was gloomy for toy makers. He predicted that thousands more factories would close in China next year.

“The tightening credit market has made it more difficult for manufacturers to raise funds,” he said. “It has created a huge cash flow problem.”

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Calif Suing Toy Companies Caught Using Lead

November 19, 2007

SAN FRANCISCO (AP) – California’s attorney general has field suit against 20 companies, claiming they sold toys containing “unlawful quantities of lead.”

The suit alleges that the companies — including Mattel and Toys “R” Us — knowingly exposed children to lead and failed to provide warning of the risk.

If the suit is successful, the complaint says the companies could pay a $2,500 fine for each violation.

The move follows major recalls of toys, lunch boxes, children’s jewelry and other goods during the last year by the U.S. Consumer Product Safety Commission in Washington.

The suit also names Wal-Mart, Target, Sears, KB Toys, Costco Wholesale and others as defendants.

A Mattel spokeswoman says the company had been expecting the action, and that it has already implemented a system of checks to make sure its quality and safety standards aren’t violated again.

The toys were made in China but the suit will apparently aledge that the toy companies and toy sellers were aware or should have been aware of Chinese business practices that did not measure up to U.S. standards.

Feds urge vigilance on toy safety

China seizes on Mattel apology to emphasize safety

September 24, 2007

BEIJING (Reuters) – China highlighted Mattel‘s apology over its recall of huge numbers of toys on Monday to press Beijing‘s claim that its exports are generally safe and foreign politicians and media have unfairly hyped quality scares.

Before those recalls, a spate of complaints involving unsafe Chinese products ranging from other toys and seafood to toothpaste that entered EU and U.S. markets prompted calls on both sides of the Atlantic for stricter scrutiny of made-in-China goods.

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Lead Paint Danger in China Toys Worse Than First Thought

Mattel apologises to China on toy recalls

September 21, 2007

By Verna Yu  BEIJING (AFP) – US toy giant Mattel issued a startling apology to China Friday, saying the vast majority of recent recalls of Chinese-made products were due to design flaws it had committed itself.

“It is very important for everyone to understand that the vast majority of those products recalled were the result of a design flaw in Mattel, not through the manufacturing flaw in China’s manufacturers,” said Thomas Debrowski, Mattel’s executive vice president of worldwide operations.

Debrowski made the remarks while meeting in Beijing with Li Changjiang…

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Lead Paint Danger in China Toys Worse Than First Thought

September 20, 2007


Lead Paint Danger in Toys Worse Than First Thought Leaders of the agency responsible for protecting consumers from faulty products pleaded Wednesday with Congress to increase their budget and authority in the wake of huge recalls related to lead contamination.The testimony from Consumer Product Safety Commission officials came as El Segundo, Calif.-based Mattel Inc., producer of 1.5 million of the 13.2 million toys recalled in the past month, revealed that its tests found that lead levels in paint in recalled toys were as high as 110,000 parts per million, or nearly 200 times higher than the accepted safety ceiling of 600 parts per million.“We are all to blame” for a system that allowed children to be exposed to lead-tainted toys, CPSC Commissioner Thomas H. Moore said in the first of two days of hearings before a House Energy and Commerce subcommittee. That includes, he said, “those who stood by and quietly acquiesced while the commission was being reduced to a weakened regulator.”Moore thanked lawmakers for rejecting a Bush administration budget proposal that would have required cutting full-time staff by 19 people, and urged Congress to pass legislation to give the agency better tools to protect consumers from product safety hazards.“Our small agency has been ignored by the Congress and the public for way too long,” said the CPSC’s acting chairman, Nancy A. Nord.

The agency was founded in 1973 with a staff of about 800. It currently employs about half that number, and Moore said it has about 15 people, out of a total field investigative staff of fewer than 90, to visit ports of entry to inspect the more than 15,000 product types under its jurisdiction.

The commission banned lead paint on toys and children’s furniture in 1978, but is not authorized under law to regulate lead in a product unless it may cause “substantial personal injury.” When ingested by children, lead can cause learning disabilities and behavioral problems.

Nord noted that the recalls, mainly of toys manufactured in China, have had the intended purpose of goading the entire toy industry into changing practices to prevent such violations in the future. It has also inspired the introduction of several bills to increase the authority and budget of the CPSC and better monitor imports from China.

“We must start with the CPSC,” said Rep. Bobby Rush, D-Ill., chairman of the subcommittee overseeing consumer protection. “Is the commission capable of preventing these products from entering state commerce?”

Nord and Moore also pointed to an agreement reached with the agency’s Chinese counterpart last week under which China will immediately implement a plan to eliminate the use of lead paint on Chinese manufactured toys exported to the United States.

Mattel Chairman and Chief Executive Officer Robert A. Eckert, in prepared testimony, stressed the safety of the 800 million products the toy maker and its vendors manufacture every year. He also acknowledged that the company’s investigation revealed “that a few vendors, either deliberately or out of carelessness, circumvented our long-established safety standards and procedures.”

“These recent lead recalls have been a personal disappointment to me” and those working at Mattel, he said. “Those events have also called on us to act, and we have.”

But several members of the panel complained that Mattel blocked committee staff members from visiting its plants in China and talking to the Hong Kong executives who oversee those plants. “That’s a poor kind of cooperation to be afforded this committee and it will hardly be helpful in our relationship with the company,” said committee Chairman John Dingell, D-Mich.

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China: Mattel recalls another 800,000 lead-tainted toys

September 5, 2007

By ANNE D’INNOCENZIO, AP NEW YORK – Mattel Inc.‘s reputation took another hit after the world’s largest toy maker announced a third major recall of Chinese-made toys in little more than a month because of excessive amounts of lead paint.

The latest action, which involved about 800,000 toys and which was announced late Tuesday, is yet another blow to Mattel. The news, along with other recent recalls of tainted Chinese toys from other toy makers, could also make parents even more nervous about shopping for toys this holiday season.

The latest Mattel recall, whose details were negotiated by the Consumer Product Safety Commission….Read it all:

China Calls Toy Recall ‘Responsible’ But Doesn’t Itself Take Responsibility

August 23, 2007

By AUDRA ANG, Associated Press

BEIJING – China on Thursday said a global recall of millions of its toys was the responsible thing to do, but said that was the result of new industry standards — not poor quality.

Meanwhile, a Cabinet-level panel announced the launch of a nationwide safety campaign focused on food and drugs, as well as increased monitoring of exports. The measures underscored government efforts to win back consumer confidence.

Earlier this month, Mattel Inc. recalled almost 19 million Chinese-made items around the world including dolls, cars and action figures. Some were contaminated with lead paint….

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China toy group says was aware of problems

August 15, 2007

By Ben Blanchard and Vivi Lin

BEIJING (Reuters) – China knew about problems with magnets on toys as long ago as March, an industry official said on Wednesday, following a second massive recall of Chinese-made Mattel toys due to hazards from small, powerful magnets. 

China has been struggling to convince the world its products are safe after a series of scandals over everything from tainted pet food and drugs to tires, toys and toothpaste.

Recall of China-made toys unnerves parents

August 6, 2007

ByMindy Fetterman, Greg Farrell, and Laura Petrecca
August 6, 2007

First it was Thomas the Tank Engine trains. Then Easy-Bake Ovens. And now Big Bird, Elmo, Cookie Monster and Dora the Explorer.

All are beloved children’s characters that were licensed to toy manufacturers who contracted with companies in China to make the toys. And all have had those toys recalled. Millions of them. Just since June.

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China: At Long Last Admits Food Safety Clean Up Will Be “Arduous,” Long Term