China Toy Recall Sparks Debate

2007-10-02
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CHINA, Beijing : Thomas Debrowski, Mattel's executive vice president of worldwide operations hold talks with Li Changjiang (R), head of China's top agency in charge of supervising product quality in Beijing, Sept. 21, 2007. PHOTO: AFP

An apology to China from the world’s largest toymaker has raised new questions about the responsibility for safety problems, with business experts saying the company appears to have taken blame under pressure from the Chinese government.

After a series of recalls involving Chinese-made products since August, toymaker Mattel Inc. issued a public apology on Sept. 21 at a tense meeting in Beijing with Li Changjiang, China’s minister for the General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ).

“Our reputation has been damaged lately by these recalls,” Mattel executive vice president Thomas Debrowski told Li, according to an Associated Press report. “And Mattel takes full responsibility for these recalls and apologizes personally to you, the Chinese people, and all of our customers who received the toys.”

The controversy arose from three separate Mattel recalls of some 22 million toys due to problems with loose magnets and lead paint, both of which can injure children if swallowed. Li had argued since August that Chinese contractors had been unfairly blamed for design flaws with the magnetic toys, which accounted for most of the recalls.

In interviews with Radio Free Asia, business experts said the Mattel apology appears to have been made under pressure from China’s government to preserve the company’s interests in the country.

‘Big stakes’ in China

Oded Shenkar, a professor of management at Ohio State University’s Fisher College of Business and author of the book The Chinese Century , said “most of their stuff is coming from China, and obviously the Chinese government can make their life quite miserable.”

Mattel’s statement may have eased its problems with the Chinese government even if it did not play well in the United States, Shenkar said.

“Anywhere you operate, it’s important to be on good terms with government, and much more so in China where the government still calls the shots on so many things. What it looks like is that they want to curry favor with them, but at what price? If the price is damage to your reputation, this is an enormous price.”

James Post, a Boston University School of Management professor of strategy and policy, agreed that Mattel’s statement shows concern with its ability to maintain ties in China.

“Certainly, Mattel has evidenced that they’re concerned about consumers and users of their toy products. But I think they also have very big stakes in China, and maintaining a positive and constructive relationship with the Chinese government and its various agencies is an important aspect of what they have to do.”

Post said that while Mattel has accepted blame for its toys’ design flaws involving magnets, Chinese contractors, subcontractors, and suppliers are also at fault for their use of lead paint.

“I think there’s enough blame, if you will, to go around and touch all of these parties,” he said.

String of defective products

Post noted that safety problems with Chinese exports have not been limited to products made for Mattel. In September, other U.S. recalls of lead-tainted Chinese exports were announced, including lunchboxes shipped for sale in California, bracelets made for a cancer charity in Boston, and products imported by at least six other companies.

“In fact, we’ve had for many months now an unending string of defective products that have come from China. And that’s what’s really caused the question about what does it mean when you see a product that’s made in China?”

Oded Shenkar said that customers will ultimately hold Mattel responsible for selling defective or dangerous products.

“The Mattels of the world—this is supposed to be their core capability: the ability to put this all together and to oversee it. And the fact that it happened to them is very serious as I see it for the company, whether they were ‘in charge’ or somebody else was ‘in charge.’”

But James Post argued that safety recalls spell trouble for everyone involved.

If lead paint continues to be found in products made in China, U.S. consumers will shun Chinese-made toys, causing a loss of business and trade, he said.

“The Chinese business environment will deteriorate rapidly if customers lose confidence in any company that’s doing business in China. If that happens, and it may, then I think the Chinese will see their exports of consumer goods certainly decline.”

Original reporting by Michael Lelyveld. Edited for the Web by Richard Finney.

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