China, lead paint and magnets - what went wrong at Mattel?

Source: Exec Digital USA

Date :12/10/2007 2:51:59 AM

Mattel’s China made toys contained high lead levels, and small magnets posed a choking hazard to children – we look at Mattel’s worst ever summer.

By John O’Hanlon

When something bad happens, as it will, recovery depends on two things. One, being able to find out quickly exactly what went wrong; two, good crisis management.

The problem

Things unraveled rather quickly for Mattel this summer, and though the company has had the unenviable task of very publicly covering its embarrassment and has done some of the right things, it has also given everyone else some useful lessons.

As is commonly known, more than 20 million Mattel toys manufactured by Chinese firms had to be recalled during August and September this year, some of them because they were coated with paint that contained unacceptably high levels of lead, some of them because they incorporated magnets that could harm young children if they came off – as in fact happened in a number of cases.

Now it’s an axiom of outsourcing that you have to have control of your supply chain. China is no different than any place else in this respect. It should be impossible for non-spec products, let alone poisonous ones – to ever reach the market, something that can be assured through a simple QA procedures. That much was accepted by Bob Eckert, Mattel’s CEO, when he took personal responsibility for ensuring that Mattel’s systems and people are dedicated to safe toys.

And he said how it would be done in the future with a three stage lead paint safety check, sample testing before the toys reach the shelves, third party audits of its safety systems and more auditing of manufacturers. “If we find any issue, no matter how small, we will work closely with the authorities world-wide to inform consumers quickly and take prompt corrective action.”

The response

So far so good. But all these things should have been happening before. Inevitably the toymaker’s market share has taken a dive, its seasonal prospects must be dire, and every company in the world must be feeling Mr Eckert’s pain. Meanwhile all this happened just in time for Mattel to pick up top prize in the Consumers International Bad Products award. The citation is worth quoting in full:

Mattel recalled over 21 million toys from around the world over a five-week period in 2007, due to design faults and the use of poisonous levels of lead paint. The recall included one toy that contained over 200 times the amount of lead permitted by US lawmakers.

Mattel CEO Robert Eckert was accused of stonewalling a US congressional investigation into the safety of the company’s products, not acting on a request for access to the factories in question, and not allowing key Mattel staff to be interviewed by investigators.

While at first allowing China to take the blame for substandard production, in late September 2007 Mattel appeared to admit that some defects were actually a design fault of the company’s own making and that Mattel should be held responsible.

The company later said that this apology had been ‘mischaracterized’ and that they were, in effect, only taking responsibility for around 11 million of the 21 million recalls.

CI’s verdict? “This is a classic case of avoiding accountability and shifting responsibility on a global scale. Wherever the fault lies, the safety of consumers was compromised and this should be the full focus of Mattel’s attention, not finger pointing and not blame dodging.”

It’s little consolation for Eckert that this crisis is not unique and nobody thinks it is entirely of Mattel’s own making, unlike for example Apple’s decision to…

To read the full article, click here