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Mattel CEO Cites New Standards, Says Will Continue to Use China Plants

Mattel Chairman and Chief Executive Robert Eckert said the toy maker will continue to use Chinese manufacturers in the wake of a second safety recall, citing increased oversight the company has put in place to monitor manufacturers outside the U.S.

In an interview on CNBC, Eckert said Chinese manufacturers' practices pose no overall danger to consumers.

Mattel recalled millions of toys Tuesday due to hazards from small, powerful magnets and lead paint, the latest round of recalls from the toymaker.

"We have been able to isolate very specific products and very specific production dates, and take corrective action," Eckert said.

In the time between Mattel's first recall and Tuesday, Eckert said, "our system has changed and evolved as we've seen recent issues with lead paint."

"We've changed our standards and we're enforcing new standards in production plants."

The CEO said the new system involves testing paint when it's received by each plant, then testing the finished product.

"Every batch of finished toys is tested before anything is shipped," said Eckert.

"And no product is leaving any facility -- whether it's produced in China or any other country -- unless every batch of that toy is tested," he said.

The recalled products include about 7.3 million Polly Pocket, Batman Magna, Doggie Daycare and Shonen Jump's One Piece play sets with the small magnets. According to a statement from the U.S. Consumer Product Safety Commission and Mattel, about 2.4 million of the play sets were recalled on Nov. 21.

About 683,000 Barbie doll Tanner play sets were also recalled due to a magnet hazard and about 253,000 Pixar Sarge die-cast toy cars with lead paint were recalled.

The latest recall involves a different Chinese supplier than the first, according to three people close to the matter who spoke on condition of anonymity because of the sensitivity of the situation.

It follows a highly publicized worldwide recall, announced Aug. 1 by Mattel's Fisher-Price division, of 1.5 million preschool toys featuring characters such as Dora the Explorer, Big Bird and Elmo. That action included 967,000 toys sold in the United States between May and August.

On Aug. 2, Mattel apologized to customers for the preschool toy recall and said the move would cut pretax operating income by $30 million. In that case, Fisher-Price "fast-tracked" the recall, which allowed the company to quarantine two-thirds of the tainted toys before they reached store shelves.

In documents filed the next day with the U.S. Securities and Exchange Commission, Mattel noted that additional information became available in July on "other smaller product recalls and similar charges were recorded." Those recalls involved design problems, according to company officials questioned last week.

Until now, Fisher-Price and parent company Mattel had never recalled toys because of lead paint.

The latest action would mark the latest in a string of toy recalls that have rocked the toy industry just as it prepares for the critical holiday season. With more than 80% of toys sold worldwide made in China, toy sellers are nervous that shoppers will shy away from their products.

In June, toy maker RC2 voluntarily recalled 1.5 million wooden railroad toys and set parts from its Thomas & Friends Wooden Railway product line. The company said the surface paint on certain toys and parts made in China between January 2005 and April 2006 contain lead, affecting 26 components and 23 retailers.

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