There’s no sign of an economic slowdown at Larry Mestyanek’s toy factory in Compton.
Whirring machines cut letters from the alphabet out of red, blue and yellow slabs of wood, making long rows of the letter E. Across the room, men with air filter masks sand toddler’s chairs that are lined up in rows as if expecting a convention of miniature leaders. The machines are so loud it’s hard to hear the rows of tiny wooden music boxes playing a disjointed lullaby.
But the bustle of activity belies what Mestyanek says is a real concern for his company, TAG Toys. A new federal regulation that took effect this week requires him to have all his products tested for lead paint by an outside firm, and Mestyanek says that could wipe out his small profit, forcing him to raise prices.
“I like the idea of safety, but this is just overreacting,” said Mestyanek, who employs 45 people. The tests for each of his 175 toys run about $2,000, he said. That’s a $350,000 hit to his bottom line, or close to what he makes in annual profit.
The testing is required under the Consumer Product Safety Improvement Act, which was passed in response to last year’s massive recalls of toys containing lead and other dangerous substances.
Manufacturers must now test for lead paint, and by Feb. 10 they must test for lead and certain chemicals anywhere in products made for children 12 and under.
Supporters, including Rep. Bobby L. Rush (D-Ill.), say the bill will help restore consumers’ confidence in the toys they buy and prevent children from suffering lead poisoning. But many small domestic toy and clothing makers say the law could jeopardize their ability to stay in business.
A German company, Selecta, recently told retailers that it was pulling out of the U.S. market after evaluating the costs of complying with the law. Thousands of others are waiting, holding their breath and hoping for amendments, said Julia Chen, a spokeswoman for the Handmade Toy Alliance, a trade group seeking changes in the rules.
“If they don’t change the law, we’d have to close our doors,” said Nick Christensen, owner of Little Sapling Toys in Eureka, Calif. “We won’t be able to afford the testing.”
His wooden rattles and building blocks, which retail for $20 to $40, would cost at least $1,500 per model to test, he said. Because he makes 20 models, his testing bill would be at least $30,000.
Christensen, who makes everything by hand, says the only things his products contain are wood and beeswax, and he’s bitter about being forced to test them for lead.
Other manufacturers say they’ve been quoted testing prices of $24,000 for a telescope, $1,100 for a wooden wagon and $400 for cloth diapers, according to the toy alliance.
Christensen and Mestyanek say they’ve never been forced to recall a toy and believe they are being punished for other companies’ lax standards abroad.
Last year’s recalls were for toys manufactured overseas for big companies such as El Segundo-based Mattel Inc.
“We are steadfast believers in U.S. manufacturing,” Mestyanek said. “So why should we have to suffer because Mattel wants to do work in China?”
Many of the businesses affected by the law were created to make better, safer toys than those available at chain retailers such as Wal-Mart Stores Inc., said Dan Marshall, who owns a toy store in St. Paul, Minn., and founded the Handmade Toy Alliance.
The new testing rules are being phased in. By Feb. 10, children’s products must be accompanied by a manufacturer’s certificate that says they do not contain lead or phthalates, which are chemicals used to soften plastic.
On Feb. 15, children’s products will have to be tested by a third party to ensure that they don’t have small parts that could be easily broken off and swallowed. In March, children’s jewelry will be required to submit to third-party tests. Bouncers and walkers will have to be tested starting in June.
Retailers could also be hurt by the new law. Julie Vallese, a spokeswoman for the Consumer Product Safety Commission, said stores would not be allowed to sell inventory after Feb. 10 that had not been tested for lead content. That means if the products are made out of natural materials but have not been tested, they’ll have to be pulled from the shelves.
It’s a blow to retailers who are confused by the law and already hurting in a slow economy.
“It’s going to be illegal for me to sell a lot of the stuff I have in my store,” said Stacy Scott, the owner of Treehouse in the Glen, an eco-friendly San Jose store that opened four months ago and sells toys made out of natural materials.
Scott says her suppliers are going to raise their toy prices, which are already high compared with the costs of toys made in factories overseas. She fears she’ll have to close the shop down, her dreams of selling locally made handcrafted toys thwarted by the mistakes of overseas companies.
The toy alliance is hoping to get Congress to revise the law to exempt manufacturers who make children’s items exclusively using natural products such as wood and cotton, or to allow them to test those raw materials instead of the finished products.
Don’t count on that, said Sharon Jenkins, a spokeswoman for Rush, the congressman.
“Nobody likes to tighten up,” she said. “But the law is the law, and the standards aren’t going to be changed.”