Mattel says toys recalled for design flaws, not lead paint

[madurobob]

Mattel has admitted that most of the toys recalled in recent safety scares had "design flaws" and that Chinese manufacturers were not to blame.

See the BBC story here: Mattel Sorry for Design Flaws

Seems much of the press lately about Chinese-made toys recalled for lead paint were a bit off base. Mattel now says "the vast majority of these products that we recalled were the result of a flaw in Mattel's design, not through a manufacturing flaw in Chinese manufacturers."

If you remember, one Chinese company leader killed himself after one of the recalls.

Do you think Mattel is really accepting blame for this, or are they covering their bases with an increasingly powerful driver of the world economy?

And then this in the story from from Mattel:

you cannot recall 10,000 products just because one is sub-standard

Oh hell yes you can! Especially if that one sub-standard product is likely to injure a kid and you're not really sure about the rest. Its best to err on the side of safety, no?

I, for one, welcome our new Chinese overlords. But isn't it OK to insist on safe toys?

 

[Wolfman]

There's a lot happening behind the scenes here.

Part of this is due to a lack of clarity regarding specific requirements. The lead levels were acceptable based on international standards, but the U.S. recently adopted their own standards that are rather different. This in and of itself caused a lot of confusion (international standards measure only the amount of lead in the paint itself; American standards use a calculation that measures total amounts of lead in the entire product, including paint). The toys were, apparently, acceptable according to international standards, but not American standards. There is some confusion as to whether Mattel stipulated this key difference in their product orders (which would require different production standards for toys sent to Europe as opposed to U.S.).

I'm sure that there were issues on the Chinese side. However, Mattel needs to maintain a good relationship with the Chinese government, and appearing too critical would likely result in the gov't turning around and creating more problems for Mattel, also.

This way, they help the gov't save face.

 

[geni]

A significant number of the recalls had nothing to do with paint rather how magnets were fixed to the toys.

 

[Rob Lister]

And then this in the story from from Mattel:

Oh hell yes you can! Especially if that one sub-standard product is likely to injure a kid and you're not really sure about the rest. Its best to err on the side of safety, no?

YOu win. Yes, you can, but not if you want to remain in business. The risk assessment is key to making the decision.

 

[madurobob]

YOu win. Yes, you can, but not if you want to remain in business. The risk assessment is key to making the decision.

yaay, I like winning!

Oh, so its gonna be like that.

Yes, risk assessment is certainly the key. Hopefully the negative risk associated with maiming innocent children is what drove them withdraw products until they were sure they were safe.

 

[madurobob]

There's a lot happening behind the scenes here....

Thanks Wolfman, I was unaware of the nuances of the lead regulations.

But, working in China is certainly not anything new for Mattel and the new US regs could not have been a surprise to Mattel. I have my doubts that Mattel simply forgot to tell their Chinese suppliers the proper requirements, tho I admit is is possible.

 

[Francesca R]

Yes, risk assessment is certainly the key. Hopefully the negative risk associated with maiming innocent children is what drove them withdraw products until they were sure they were safe.

I tend to think that the public tolerance for negative risk with respect to product "scares" (particularly if it is food/drink or anything to do with children) is probably irrationally low. But it is what it is.

Sometimes it feels a bit like people think that one faulty product is highly virulent and is going to infect all the other ones on the shelf, or something like that.

 

[Foolmewunz]

Thanks Wolfman, I was unaware of the nuances of the lead regulations.

But, working in China is certainly not anything new for Mattel and the new US regs could not have been a surprise to Mattel. I have my doubts that Mattel simply forgot to tell their Chinese suppliers the proper requirements, tho I admit is is possible.

Actually, that's appearing to more-and-more look like the answer... That Mattel blew it big time and didn't change the design specifications. There is absolutely no excuse for this. They ship to Europe and many other countries. And I'm sure they have a bank of specialists in various forms of compliance (social, health, environmental, etc...) just to keep them alerted to changes in regulations that will (would) mean they have to re-label, re-design, or re-package their products.

Further, Mattel wouldn't admit to design/specification errors on their own just to give face to the Chinese. The FDA and US Government both get cable, I think. They'll have seen the statement, so my guess is that Mattel was about to get hammered with a huge penalty or investigation in the US, and they decided to at least do a little bit of good and possibly get some mileage out of it.

Someone's head is going to roll over this. I assume the guys in Mattel will be glad they're not in China, where that statement might be taken more literally.

 

[Crystal]

Sometimes it feels a bit like people think that one faulty product is highly virulent and is going to infect all the other ones on the shelf, or something like that.

Well, if the fault in the product is *lead paint*, it's not unlikely that the same paint was used on a lot more products. A fault in the actual parts used is much more likely widespread than, say, a fault in the actual manufacture process.

 

[Corsair 115]

When all the talk about unsafe Chinese toys and recalls started, I couldn't but help think of how many recalls there have been in the last five or ten years from Ford, GM, and other automotive companies involving possibly serious safety defects...

 

[Foolmewunz]

Disclaimer: I have nothing to do with shipping for Mattel or Toys R Us or any major toy distributors or retailers. (Just to make it clear that I'm applying knowledge of the business as a whole and not specific info on these companies.)

I'm trying to find out through the grapevine how Mattel and others are handling the recall and returns. There's a little-known complication with returning goods, even defective, to China. The Chinese government won't let them into the country!

China provides drawbacks to licensed exporters. If the factories are solely and Ex-Im (export-import) entity, they are not licensed to bring the products back for resale. Plus, the Chinese government is not likely to want products that have failed US FDA inspection back on the market in China. Would someone in the EU buy them? Yes, but not without proper EU packaging, meaning a very expensive operation, putting the costs well over the return.

If they can't return the goods to China (already expensive as hell on products that work with a 5%to 7% margin, at best), then the only alternative is to destroy them under EPA supervision (or other government agency authorization), and that's even more expensive.

Whichever has to be employed this is going to be a multi-million dollar hit on Mattel. You can buy insurance for Errors and Omissions, and I'd assume that Mattel is covered. But the deductible is huge, and the facts in the case will take years to iron out. And that's just the cost of the return and/or disposal of the goods. They will also have to eat the entire invoice value of all the goods contracted for, as they've admitted that there was no fault of the manufacturers. This will be settled commercially - no way Mattel wants this in the courts.

 

[madurobob]

This is looking more and more like a major FU for Matel. It also shines a light on a big hidden risk in offshoring your manufacturing to China.