Opinion: Are Mattel and China toying with ethics?

Any product recalls are troubling, but especially toys. To save money, U.S. toy makers outsource most of their manufacturing to China, which makes 80 percent of U.S. toys.

The recalls include millions of the most popular toys, such as Barbie, Polly Pocket, Spongebob Squarepants and Thomas the Tank Engine. Some of the items were defective because of small parts children could remove and swallow. Also, paint containing lead coated many of the toys.

The recalls come at a critical time for major U.S. toy makers, such as Mattel. The Christmas season is approaching and U.S. toy makers produce more than two-thirds of their revenues during Christmas. The impact of the recalls on American consumers rightly concerns U.S. toy makers. A September Associated Press – Ipsos poll shows that American consumers are upset about the recalls and are quick to affix blame:

• 84 percent of those polled blame both Chinese manufacturers and U.S. toy makers for the defective toys; and

• 75 percent say the U.S. government must accept some responsibility for the recalls.

China’s response

China’s business culture is part of the problem.

Government control is lax, and health and safety concerns are not manufacturing priorities. Under pressure to win contracts and cut costs, Chinese manufacturers sometimes ignore contract specifications and substitute inexpensive or even illegal materials for those called for in contracts.

In response to the problem of defective goods, Chinese government officials promise to get tough on defective product manufacturers and to improve product safety inspections. They also, however, accuse the U.S. government of using the issue as a pretext for protectionism. In addition, Chinese officials blame U.S. toy makers for the problems, contending that Chinese manufacturers receive defective designs. Chinese officials further criticize U.S. toy makers for a lack of on-site inspectors.

It is true that U.S. toy makers sent a few design defects to some Chinese manufacturers. To accuse U.S. toy makers of too few on-site inspectors, however, is untrue. Major U.S. companies put an extensive number of safety inspectors in Chinese manufacturing plants. The problem lies with defects that inspectors cannot spot, such as lead in paints.

U.S. inspections

In the United States, the Consumer Product Safety Commission is responsible for testing suspected defective goods, both domestic and imported.

CPSC employees, however, work under difficult conditions. Their laboratories need updating. The commission’s staff has shrunk since 1980 from 975 workers to 420 workers – and only one of those is a full-time toy tester. The commission’s acting chairperson, Nancy Nord, says the commission investigates only 10 percent to 15 percent of the reported injuries or deaths linked to consumer goods.

Politicians are quick to make public promises on anything that threatens children’s safety. They recently introduced several bills in Congress to increase CPSC’s yearly budget from $62 million to $80 million, beginning in 2009 with yearly 10 percent increases. Proposed legislation increases penalties for defective products and requires independent certification for imported toys.

Toy makers’ reaction

Fortunately, U.S. toy makers are not content to rely on the governments to improve toy safety.

The nation’s largest toy makers are taking the initiative and are seeking immediate legislation that mandates the frequent testing of all toys, domestic and imported. In addition, they propose setting up uniform global standards for toy testing laboratories.

Under the U.S. toy makers’ proposal, the toy makers will pay for independent laboratories to check a set percentage of all toys for safety. Only certified safe toys will go to retailers.

Instead of waiting for government to act, U.S. toy makers quickly proposed a common sense solution.

John D. Copeland, J.D., LL.M., Ed.D., is an executive in residence at The Soderquist Center for Leadership and Ethics and professor of business at John Brown University in Arkansas.[[In-content Ad]]