Mattel recalls more Chinese-made toys

Los Angeles Times Staff Writers

First it was tens of millions of containers of pet food recalled because of tainted ingredients from China; then it was 1.5 million of the popular Thomas & Friends wood trains, made in China, recalled for lead paint.

Two weeks ago, El Segundo-based Mattel Inc., one of the most trusted names in playthings, jolted consumers with warnings that 1.5 million of its Chinese-made Fisher-Price toys also could contain lead paint.

And on Tuesday, Mattel recalled more than 18 million more toys worldwide because of new worries about lead paint and, because of design problems, magnets that can come loose and cause serious health problems if swallowed.

Recalls happen every year -- many of them far bigger than the ones that have grabbed headlines in 2007. But lists of products deemed unsafe after being shipped to stores don't usually get the attention that they have of late.

"There's more awareness," said Britt Beemer, chairman of America's Research Group, a consumer marketing firm that conducts nationwide weekly surveys of 8,000 to 15,000 consumers. "The pet story probably brought it home that people should be more concerned about the things made in China than ever before. And the toys issue has the potential of bringing that threat to your children, which makes it even more emotional."

No injuries have been reported in connection with any of the toys recalled Tuesday. But the Consumer Product Safety Commission, the federal agency that oversees product recalls, said it was unacceptable for any product to be imported with lead paint, which has been banned in the United States for nearly 30 years because of its link to brain and neurological problems.

Still, a spokeswoman for the agency sought to put recent recalls into perspective.

"Of the 409 recalls that the agency has done this year, 44 are toys. That's a lot less than last year," said Julie Vallese. "People are paying attention to recalls, and that's a good thing."

In toy aisles around Los Angeles on Tuesday, many consumers were aware of the recent problems and concerned.

As he pushed a shopping cart toward the Toys R Us store on La Cienega Boulevard in West L.A., Mark Rosenkrantz, 57, a physicist from Israel, wasn't sure what he was going to buy for his new grandson. But he said it probably wouldn't be "anything with paint on it from China."

"I'm definitely less secure about what I am going to buy now," he said. "You just can't be sure, and it raises questions about everything that comes from China."

Legislators and federal officials have seized on consumer awareness to demand better oversight, more company accountability and industrywide cooperation to safeguard products on U.S. store shelves.

Wall Street analysts were split on the possible repercussions for Mattel and the toy industry as a whole. Some suggested that consumers have short memories, particularly when it comes to trusted brands and toys at holiday time. Other analysts lowered sales and earnings estimates for the company because of the possibility of more lasting consequences.

Mattel said Tuesday that routine product tests late last month -- not the enhanced safety checks put in place after the first recall -- identified lead paint in a "Sarge" toy from the "Cars" movie die-cast vehicle line.

After getting confirmation of those findings at the end of last week, Mattel said the company asked the government to "fast track" a recall of 436,000 of the items -- which look like military Jeeps -- including 253,000 in the U.S.

Mattel said one of its subcontractors, Early Light Industrial Co. in China, engaged another Chinese factory, Hong Li Da, for one part of the decorating process and followed Mattel rules by supplying the second company with an appropriate paint for the job. Mattel said that Hong Li Da, however, instead used an unauthorized paint with lead from another supplier.

Mattel's bigger announcement Tuesday was an expansion of a recall from November that centered on a design issue rather than a production problem.

The company said 7.3 million Polly Pocket play sets contained small, powerful magnets that could come loose.

If two or more magnets are swallowed, they can attract each other and cause intestinal perforation or blockage, the Consumer Product Safety Commission said. Three reports last year of children who required surgery to correct intestinal perforation after ingesting the magnets prompted the recall of 2.4 million of the dolls and accessories.

Mattel said a renewed examination of similar products, most of which are no longer on the market, prompted it to widen the recall and add 1 million Doggie Day Care play sets, 683,000 Barbie and Tanner play sets and 345,000 Batman and One Piece magnetic action figure sets.

The company said the products make up less than 2% of the roughly 1 billion products it makes each year.

"I'm disappointed about what has occurred," said Mattel Chief Executive Robert Eckert. "There could be additional recalls; we are testing at a very high level here. What I think is important is that parents understand what we're doing to fix those issues."

New procedures put in place after the Fisher-Price recall expand on the company's previous program of testing raw materials and testing random samples of finished products, said Jim Walter, the company's head of worldwide quality assurance.

Besides requiring that paint come only from certified suppliers, Mattel will require testing of every batch of paint at every vendor plant. The company also said it would increase unannounced random inspections and would test every batch of finished toys to ensure their safety.

Eckert said he could not put a price tag yet on the new procedures. But the company said the costs of the recall were factored into the $30-million charge it announced after the first lead-paint issue arose.

Some analysts questioned that figure.

Typically, companies think only about the short-term expense of getting bad products off the shelves and fail to consider future costs, said Keenan Yoho, a Rand Corp. supply-chain management specialist who believes that Mattel's costs could be double its estimate.

"Some parents will say, 'OK, I only have to worry about these toys,' but others will eliminate both the immediate threat and the possibility of other threats," Yoho said.

Gerrick Johnson, an analyst with BMO Capital Markets in New York, reduced earnings and sales forecasts for a second time after Tuesday's announcement.

"I think people will shy away from certain brands and certain toys because of what's happened, and I've actually seen that already," said Johnson, who has cut $50 million from his Mattel sales forecasts because of the two recalls.

"People aren't going to drop Dora and "Cars" products en masse, but on the periphery, you have a few lost sales here and there, they add up."

Johnson also cautioned that the broader toy market could suffer if parents shy away from Chinese-made goods, which make up about 80% of the toys on U.S. shelves.

At a Toys R Us in Los Feliz, teacher Steve List credited Mattel for quick action in launching the recall.

"I think they corrected the problem very quickly," he said.

And he added that he wasn't inclined to check labels every time he headed to the toy store.

"If I like a toy I'm going to buy it," he said. "Hopefully Toys R Us and Mattel will have dealt with any problems."

In part as a result of the recent recalls, the federal safety agency said it was talking to the toy industry about setting up an independent system for testing and certifying toy safety, spokeswoman Vallese said.

For more information about the recalled magnet toys, consumers can call Mattel at (888) 597-6597. For the recalled cars, call (800) 916-4997.

abigail.goldman@latimes.com

ron.white@latimes.com

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