More Mattel recalls likely

Times Staff Writers

Toy maker Mattel Inc. is expected to recall additional toys because of possible safety risks, just two weeks after issuing lead paint warnings about 1.5 million Chinese-made infant and preschool toys.

The El Segundo-based company is likely to recall at least one kind of die-cast car, also made in China and also because of possible lead paint contamination, said a person who asked not to be named because the federal Consumer Product Safety Commission has yet to make the recall official.

Another toy on the new recall list has magnets that can pose a risk if swallowed, the person said.

Neither the federal commission nor Mattel returned calls for comment.

With few details about the scope of the recall or the specific products involved, toy industry experts were hesitant to put a price tag on the latest trouble for Mattel, the nation’s largest toy manufacturer.


Although at least one major retailer said it had not heard about a new recall and had not received instructions to remove any additional Mattel toys, a toy industry veteran said word had been getting around.

“People have been talking about it for a week, that there was going to be another recall from Mattel,” said Chris Byrne, an independent toy analyst and contributing editor to Toy Wishes magazine. “Ever since the first one came out, everyone has been talking about where is this going to happen again. It’s logical that it wasn’t an isolated incident.”

The latest recall is said to involve different suppliers from the one implicated in the first set of Mattel’s Fisher-Price recalls.

In that case, the suicide of one of the Chinese factory’s owners has intensified the spotlight on China’s quality control problems and the strong role guanxi, or connections, play in business dealings here.

Cheung Shu-hung, a co-owner of Lee Der Industrial Co. in southern China, came under severe pressure this month after Mattel voluntarily recalled the plastic preschool toys made by Lee Der that contained paint with excessive levels of lead. The company sent 967,000 toys to the U.S. but stopped two-thirds of them before they hit store shelves.

State media reported Monday that Cheung greeted workers this weekend, chatted with them and then went quietly off to the company warehouse and hanged himself.

According to the Southern Metropolitan Daily newspaper, Cheung, reportedly in his 50s and unmarried, was sold the defective paint by his best friend. “The boss and the company were harmed by the paint supplier, the closest friend of our boss,” the paper said, quoting a manager surnamed Liu.

Executives at the Lee Der factory in Foshan in southern China and its headquarters in Hong Kong could not be reached for comment.

The toys manufactured by Lee Der from April 19 to July 6 and sold in the U.S. under Mattel’s Fisher-Price brand included such well-recognized favorites as Big Bird, Elmo and the Dora and Diego characters.

Mattel’s quality problems are the latest in a series of scandals involving Chinese-made toys, tires, seafood, pet food, medicine, toothpaste, vitamins and food additives, among others. Mattel, the world’s largest toy maker, said last week that the recall would reduce its second-quarter pretax operating income by $30 million, or 47%.

China’s General Administration for Quality Supervision, Inspection and Quarantine, one of the nation’s safety agencies that often fight over turf, placed a temporary export ban on Lee Der’s products late last week.

On Friday, Mattel was served with a class-action suit for allegedly violating consumer protection laws. The suit said an offer to replace some 1.5 million of the lead-paint tainted toys worldwide with vouchers rather than cash was inadequate.

Meanwhile, the Consumer Product Safety Commission said last week that it was investigating the first Mattel recall -- standard procedure after a company’s report about a potential problem. The agency will examine whether Mattel reported its concerns to authorities as soon as it should have. Companies are required to alert the agency within 24 hours of learning of a possible hazard.

Fisher-Price in March agreed to pay a $975,000 civil penalty for failing to timely report a potential choking hazard with a nail fastener in its Little People Animal Sounds Farm. In 2001, Fisher-Price paid $1.1 million to settle the agency’s charges that it failed to report hazards with its Power Wheels ride-on toy cars, at the time the agency’s largest-ever fine. Fisher-Price recalled 10 million of the cars in 1998, although Mattel denied the agency’s charges.

“We believe that the CPSC is going to find that Fisher-Price acted expeditiously in this matter and we will continue to cooperate with the CPSC in every respect,” Mattel spokeswoman Jules Andres said.

Since 2000, Mattel and its subdivisions have recalled products 28 times -- 22 of which were in the Fisher-Price division.

In the past, the publicity surrounding such a recall scandal might have been limited to China, where loose standards are not taken so seriously. “Now it’s world news rather than local news,” said Paul Wong, a clinical psychologist with the University of Hong Kong’s Centre for Suicide Research and Prevention.

Adding to the pressure on Cheung, Mattel invited competitors to sever their relationship with the Chinese supplier.

Reports of his death spread quickly through China’s toy industry, the world’s de facto North Pole, where 10,000 factories account for more than 75% of global toy manufacturing.

“I’m surprised to hear about his suicide,” said Xu Quanning, secretary of the Shanghai Toy Assn. “Then again, $30 million is a huge financial hit. He must have known about the lead paint. It’s almost impossible the company chief wouldn’t know.”

It’s important that Mattel not be let off the hot seat too easily, however, some said. “It’s cheaper for American companies to produce overseas in low-cost countries,” said Zheng Yusheng, Shanghai-based associate dean of the Cheung Kong Graduate School of Business and a specialist in supply-chain management. “But brand companies like Mattel get high profits. With the profit also comes the responsibility to check the quality. If toys have lead in them, it’s easily found.”

Other toy executives in China said the majority of the industry was safe, with Lee Der’s apparent problems the exception and not the rule. “No country is problem-free,” said Yao Yuzhi, president of Beijing-based Yao Yuzhi Potential Education Workshop, which makes toys said to boost toddlers’ IQs. “Even America has export-quality problems. Maybe [Cheung] had other reasons to kill himself.”


Magnier reported from Beijing and Goldman from Los Angeles.

Gu Bo in the Beijing bureau contributed to this report.