Manufacturers Share the Blame for Product Recalls

"I would be willing to bet that most of these companies specified that you cannot use lead paint, and the contractor signed on to it, and the subcontractor signed on to it, but stuff gets through," said Alberts, who works for Build-It Engineering, a manufacturing firm. "When you're the company the size of Mattel, and you've got 30-40 manufacturers that you're giving business to, it's really hard to keep track."

"More and more of what we consume is being manufactured outside U.S.," said McBean, "and when you're outsourcing product and not manufacturing internally, there is a step lost in quality control. If companies are going to outsource more and more, they have to apply a lot more resources to quality control."

But for firms looking to maximize profit in very competitive industries, paying for quality control is not always an option.

"It's hard to introduce extra cost with a lot of retail pressure – you just can't afford to put in an expensive quality control unit," Alberts said. "The margins in toys are not substantial, especially in a competitive market. If you're selling cars for $1.00 each, it's very difficult to have someone inspecting every single car."

Kirby said he has visited semiconductor manufacturers and petrochemical plants in Shanghai and found the factories to be in excellent condition. The precision and quality those industries demand – not any benevolence on the part of the Western manufacturer – was largely responsible for that, Kirby said.

Fallows compared China's manufacturing boom – and the attendant lack of government-imposed standards – with comparable booms in America and Britain, which were characterized by rapid industrial expansion but very low standards.

Just like in early 20th century America, Fallows believes change will come with pressure. Only after media investigations and recalls expose factories' shortcomings will low-end manufacturers such as toy companies feel the financial pain necessary for them to increase the demands they place on their facilities in China.

"This is very much like the American factory ecology of the Upton Sinclair era where you had the muckrakers exposing…the excesses of immature manufacturing capitalism," Fallows said.

And Kirby said that those same market pressures that will force Mattel to improve its standards will also cause the Chinese government to more closely regulate slipshod manufacturers.

"To the degree a scandal like this brings people back to an earlier day when made in China meant not well made or dangerously made…it's not just an embarrassment for China but also will have economic costs," he said. "The Chinese government and Chinese manufacturers [now] have a strong set of reasons to increase oversight at all levels."

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