Mattel CEO Defends China Operations

Aug. 14, 2007 — -- Toy giant Mattel Inc. issued its second product recall in two weeks Tuesday, this time sending a warning to consumers about more than 9 million toys made in China that either contain lead paint or pose a swallowing hazard to children.

Mattel issued a recall earlier this month for about 1.5 million Chinese-made Fisher-Price toys that contain lead paint.

In an interview with "Good Morning America's" Chris Cuomo, Mattel chief executive Bob Eckert called the company's testing standards "rigorous" and defended Mattel's operations in China.

Since government regulations controlling industry are virtually nonexistent in China, many Western companies move their manufacturing operations there to save money. Seventy to eighty percent of the world's toys are made in China, according to the Toy Industry Association.

Cuomo grilled Eckert about Mattel's oversight of manufacturing in China, and asked him how much money the company saves by making toys in China.

"The question of safety is not about the money. It's about doing the right thing for consumers. Again, we make toys in markets other than China," Eckert said.

You can read a partial transcript of the interview below, and watch the full interview on ABC News Now.

Chris Cuomo: To a parent, all they're going to take from this discussion is why didn't you pull the toys as soon as you knew they may be a threat? That's what a parent's concern is. What's your answer?

Bob Eckert: These toys are generally no longer at retail. These are toys that were sold between 2002 and 2007. So again what we're trying to do is take the standards that we have today that we've worked with the CPSC [Consumer Product Safety Commission] to develop and apply them retroactively to toys that were sold years ago. A lot of parents are not going to have these toys.

Cuomo: In terms of responsibility, do you understand that even though we keep hearing about these toys being made in China, this is your responsibility, these toys may have been made with your own hands. Do you understand that?

Eckert: Well, I apologize to everyone involved. Nobody likes to have recalls, but the fact is the safety of children is the utmost important thing here, so we want to inform the public of our new standards and what we need to do retroactively to encourage parents to send those products back to us.

Cuomo: Can you in good conscience tell American parents that your toys are safe?

Eckert: Yes. We have the most rigorous testing in the world, and in fact we keep increasing our standards. We've worked very hard over the past weeks and months to ensure that our toys are very safe.

Cuomo: Now when you say nobody likes to have recalls, let's look at why we have the recalls. Evolving your standards is one thing but fundamentally it comes down to where you're having the toys made. They're being made in China, you don't have oversight, there's tremendous pressure for them to cut corners and keep cost down, because that's how you make money, so allow me to ask you sir: How much money are you saving having these toys made in China?

Eckert: We make toys in several markets around the world. And the fact is that since most of the toys are made in China, most of the problems with manufacturing, the recalls, come from Chinese toys. When we've made toys in other markets over the years, we've had recalls from those markets.

Cuomo: But because of what the obvious situation is in China, allow me to ask you again, how much money do you save making these toys in China?

Eckert: The question of safety is not about the money. It's about doing the right thing for consumers. Again, we make toys in markets other than China.

Cuomo: Right, but when people hear about a lack of control and more and more recalls coming out of the same place, and it seems that you are making them in China to save money so you can make more money for your company, it is very important. Safety is about money for parents because they know that how much you spend on a toy may very well compromise how safe it is. Isn't that a fair assumption?

Eckert: We make toys in several markets around the world, not just in China, and we apply our standards and our oversight to all markets of the world.

Cuomo: I understand that. But you can also understand the concern of parents and the general question will be is it worth it to keep making toys in a place where you don't seem to have oversight or control of what's coming out, especially if kids, young kids' lives could be at risk?

Eckert: We do have oversight and control, and that's why we can identify specific toys, specific batches, specific production issues, and they're relatively isolated when you look at the half a billion or billion toys we make every year. Our job is to have that oversight, to enforce those quality standards and we can ensure your viewers that we are doing just that. Nobody likes to have recalls, but we continue to test with the most rigorous system in the toy industry, and if we have additional issues, we'll be prompt, just like we have been this time.

Cuomo: And you have had additional issues because this is the second recall and a tremendously large one in terms of volume and quality. Let me ask you, what would make you stop making toys in China?

Eckert: Well, we make toys in several markets around the world, and the issue of quality and safety is not just a Chinese issue. This is important to us regardless in what country the factory exists.

Cuomo: Any dialogue going on within your company whether or not you're compromising safety by trying to lower how much it costs to produce the toys? I mean, it has to come up at some point if you have to keep having safety recalls.

Eckert: We never compromise safety. That's the most important thing. And that's why we want to talk to your viewers today and recall those products that don't meet our standards today.

Cuomo: And I'll ask you as a final question, you're saying it's important to talk to our viewers, to let them know everything is OK. Certainly that's going to be their question, sir, so I'll ask you one more time. Are you saying to our viewers, to the moms and dads out there, that even though we've had these two recalls fairly close together and there are millions of toys out there that need to be taken back, our toys are safe. Can you say that to them?

Eckert: Every batch of toys we're producing meets our rigorous standards and we're testing every batch of toys before it's released to the retail chain.