Mattel Toy Recalls

With respect to the product launch at Toys R Us with the exclusive toy set, there are risk factors that need to be understood to ensure they are cost effective and operationally sound

In 2004, Mattel Inc. first filed a lawsuit in Los Angeles County Superior Court claiming that its former employee, Carter Bryant, violated copyright infringement and breach of contract. Mattel is widely known for their popular Barbie dolls and MGA Entertainment have their Bratz dolls, which were the popular modernized Barbie in the 2000’s. In 2008, a federal jury ruled in favor of Mattel because they believed Mr. Bryant developed the concept of the Bratz doll while working at Mattel, then leaving and pitching his idea to MGA (“Barbie”). Mattel was awarded $100 million, however, the verdict was appealed resulting in a retrial.

Mattel has been criticized heavily for having to recall not once but thrice in 5 weeks 20 million toys manufactured in China with lead paint and/or loose, potentially dangerous magnets. Clearly Mattel does not have sufficiently tight quality control procedures in its supply chain to compensate for the extra risks of outsourcing to Chinese subcontractors and clearly there are design flaws in the toys with the magnets that could come loose. Although many observers give the company credit for responding to the crisis quickly with an apology from the CEO and pledges to institute more rigorous product safety checks, Mattel still faces a number of problems, including significant costs associated with the recalls and new

time. For manufactures of any product from food to medicine to vehicles, they must create items that are safe to use. This is not only necessary to long term brand value and company success, but it is required by law. Perfection is the goal; however product failure and defects always occur, especially in advanced products such as vehicles. According to the statics, we found that Ford used to face the serious lawsuit with their tires; Toyota lost a fortune by recalling of their defected vehicles. (MotorTrend, 2011)

March 2006, one of Mattel’s acquisition companies, American Girl Inc., had to recall about 180,000 pieces of American Girl Children’s Jewelry due to toxic levels of lead paint. (cpsc.gov) Lead paint was then also found in several more products leading to four other recalls over then next year and a half, in various Mattel toys. Lead based paint, wasn’t the only major recall issue Mattel was having at that time, toys were also being recalled for small loose magnets. If a child swallowed the magnet they could choke. If more than one magnet was swallowed it could cause the magnets to attract one another inside a child causing infection, blockage or internal perforations all of which could be fatal.

“Almost one in three toys in China contains heavy metals, with one in 10 containing excessive levels of lead, according to new research.”(Moore, 2011) The US has been importing Chinese-made toys for many years. There have been many recalls from large toy brands, such as Mattel, due to extremely high lead levels. These toys are very dangerous to children. However, Chinese-made toys are cheaper than US-made toys. There are two sides to this problem.

Years passed before the Mega Brand Agency and Consumer Product Safety Commission (CPSC) began to read the reports and concerns about their popular Magnetix toy. However, they were working behind the scenes in order to keep the reports and concerns unknown to reporters so they would have to take responsibility for their action. When Mega brand and CPSC finally started taking action, the first recall they had performed barely made a difference. Many children still encountered the toy, many parents still had access to the hazardous product. CPSC still pushed 3-4 more recalls that had the same outcome as the first. After many failed attempts to recall the broken toy they stated that they had been putting caution label in the new improved

Mattel’s response to the lead tainted toys crisis exemplifies the importance of having a strong, updated crisis management and communication plan that reflects the company’s culture and values. Companies, in the future, should look to Mattel’s response as a model for planning and responding to

As children grow their bodies are able to absorb more lead than an adult (Pearce & Robinson, 25-5). At the time of the recalls, China did not have regulations in place regarding the levels of lead in paint. In addition to lead being found on paint used in children’s toys, Mattel would eventually end up recalling millions of products that contained unsafe, removable parts. In the end, Mattel ended up recalling 19 million toys made in China.

Mattel’s iconic and best-selling brand is The Barbie. Introduced in 1959 as “The Teenage Fashion Model,” Barbie allowed girls to experience fashion and to explore various dreams, fantasies and aspirations without ever leaving home. Because of the introduction of the television in the 1950 's, companies discovered a new consumer audience among children and teenagers. The post-war era saw a strong economy advancing the middle class suburban families. Now, buying toys became a year round business versus holiday or luxury items.

Serious adverse event reports (encompass death, life-threatening events, hospitalization, disability, congenital anomalies, and/or required interventions, and disabilities) and recalls related to medical device are due to failures in the quality systems during the pre-market activities. The number of adverse event reports has increased dramatically; these post-market issues uncovered the failures in the quality systems such as design controls and production and process controls that could be a strong predictor for recall root cause. The number of complexity of medical devices has grown rapidly. In parallel, the medical device supply chain has become increasingly cost competitive and globalized. The quality systems that manage the evolving complexity of medical devices together with multiple layers of thousands of raw material, component, and sub-component suppliers, all of whom potentially impact final product quality and performance.

As we can see Mattel does a pretty good job of of managing risk within its own business. However, it is some of these large multi national companies that often overlook managing corporate integrity risk in there supply networks. Companies have inserted clauses into their standard contracts with suppliers requiring them to comply with the rules and regulations applicable and materials used must exactly that which has been stated in the contract.

Toys R Us company is undergoing a variety of difficulties with its business. The problems the company is facing are linked to its many weaknesses which include failing its promise of best variety of products and competitive prices (Muller pg. 1) The debt the company acquired over the years has not helped them to overcome these difficulties. The prediction for this company include regaining its former business image by slashing their prices to compete with other companies in the industry and obtaining solid future contracts with vendors to provide an assortment of quality

As product recalls continue to skyrocket, it is important to view the statistics and to

Mattel, Inc. is the world's largest toy company based on revenue. The company produces Barbie dolls, Hot Wheels and Matchbox cars, Masters of the Universe, American Girl dolls, and board games. The company's name is derived from Harold "Matt" Matson and Elliot Handler, who founded the company in 1945. Handler's wife, Ruth Handler, later became president, and is credited with establishing the Barbie product line for the company in 1959. Mattel closed its last American factory, originally part of the Fisher-Price division, in 2002, outsourcing production to China, the beginning of a chain of events that led to a scandal involving lead contamination. On Friday, September 3, 2010 a mini "Flash Crash" appears to have occurred in Mattel shares which plunged 22% in pre-market trade for no apparent reason, only to recover shortly thereafter.