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Even more recalled Chinese-made toys

Marketplace Staff Aug 14, 2007

TEXT OF INTERVIEW

Doug Krizner: Today, leading toy maker Mattel launched an ad campaign to reassure parents its products are safe. You’ll remember back two weeks, when the company recalled 1.5 million toys made in China because of lead paint contamination.

Now, a second recall, and it’s nearly six times the size of the first.Today, nearly 9 millions products were cited, with problems ranging from lead paint to magnets that can be harmful if swallowed.

Let’s bring in Eric Johnson, he teaches at the Tuck School of Business at Dartmouth. Eric, you follow the toy industry, what’s your reaction to this news?

Eric Johnson: You have to know, of course, that toys have been safely made in China for a long time. So while I’m sure some American consumers are waking up this morning and thinking “Oh my goodness, I don’t want to buy toys made in China,” for American consumers to avoid Chinese toys would be very difficult.

Krizner: Eighty percent of what the world sees in terms of volume comes from Chinese manufacturers.

Johnson: That is a lot, and you know, 80 percent may be even underestimating it. I mean it, truly, the vast majority of toys come from China.

Krizner: Is it a production problem that occurred as volume increased, as the demand for Chinese manufacturing became greater? I mean, they just were unable to deal with the pick-up in the volume of work?

Johnson: I don’t think it was that. I think, you know, the lesson here and the lesson I’ll be teaching my students is that, you know, when you outsource to China — just as you outsource to any new environment — you have to really understand the supplier base. And in this particular case, Mattel has, you know, a supplier that’s gone bad on them. They should be able to catch that.

Krizner: Eric Johnson is professor of business at Dartmouth’s Tuck School of Business. Thanks very much for talking with us.

Johnson: You’re welcome.

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