Mattel Chief Executive Robert Eckert apologized Wednesday for three huge recalls this summer of lead-paint tainted toys made in China and said the company supports strengthening the U.S. government's consumer safety agency.
Mattel has beefed up its testing and safety systems and is doing everything it can to maintain the trust of parents, Eckert said in prepared remarks to be given to a Senate subcommittee.
"On behalf of Mattel and its nearly 30,000 employees, I apologize sincerely," Eckert told the Senate Appropriations subcommittee on financial services and general government.
Toy safety and the role of the U.S. Consumer Product Safety Commission (CPSC) have come under increased scrutiny after recent recalls of millions of Chinese-made toys, mainly due to excessive levels of lead.
Subcommittee Chairman Sen. Dick Durbin, an Illinois Democrat, has introduced a bill that would increase the maximum penalty for companies failing to quickly report hazards to the CPSC to $20 million from $1.25 million.
CPSC Acting Chairman Nancy Nord told the subcommittee the agency boosted its surveillance and enforcement activities with Chinese toy imports and was encouraging the toy industry to develop its own testing programs.
Retailer Toys "R" Us, which Monday said it was increasing the frequency of safety checks conducted on products sold in its stores, told the Senate panel it believed in a strong, well-financed CPSC.
"We were frustrated by some of the large recalls earlier this year, especially by what appeared to be an unacceptably long timeframe between discovery of a problem and actual consumer recall," said Toys "R" Us chief executive Jerry Storch.
Walt Disney Co has announced random tests of toys and Wal-Mart Stores Inc has said it is asking toy suppliers to resubmit testing documentation.
Recalls of defective tires, pet food ingredients, toothpaste and seafood, although not covered by other agencies, have added to consumer anxiety about Chinese exports.
"Made in China has now become a warning label," said Sen. Sam Brownback of Kansas, the ranking Republican on the subcommittee.
Durbin's bill would increase the CPSC's $63 million annual budget to $70 million in fiscal 2008, which begins on Oct. 1, and to $100 million by 2012.
Consumers Union, publisher of Consumer Reports, said the CPSC opened its doors in 1974 with a staff of 786 and a budget of $34.7 million, the equivalent of about $125 million today.
"Today the CPSC is a mere shadow of its former self," said Consumers Union Senior Product Safety Counsel Sally Greenberg, who said the agency had dwindled to about 400 employees.
CPSC Commissioner Thomas Moore said the rule banning children's products with "lead-containing paint" has been on the books for 30 years. "There is absolutely no excuse for a violation of this regulation. Violators should be held 'accountable'," Moore testified.
He said the CPSC has been trying to get funding to modernize its product testing laboratory since 1995, "yet we have never received any significant funding for that goal."
Carter Keithley, president of the Toy Industry Association, reiterated his group's call for a mandatory program to require that all toys sold in the United States be subjected to standardized tests to ensure they are safe.
Toys "R" Us is owned by a consortium that includes Bain Capital Partners, Kohlberg Kravis Roberts and Vornado Realty Trust.
Brazil Bans Mattel Imports
Brazil said Tuesday it has banned imports from toy maker Matteluntil that country's government can evaluate whether the U.S. company is fully abiding by local safety regulations.
Brazil's ban went into effect on Aug. 17, following Mattel's announcement it was recalling millions of Chinese-made toys over worries they were tainted with lead paint. The government made its ruling public Tuesday in a statement on the Trade and Development Ministry's Web site.
"The goal is to halt defective toys in the company's worldwide recall list from entering Brazil," the ministry said in the statement.
The government said the recalls prompted the suspension "of all import licenses for Mattel products," effectively banning retailers from making new toy purchases from Mattel after Aug. 17.
The suspension will be lifted only after the Brazilian body that oversees consumer product safety, Inmetro, deems the Mattel products safe, the ministry said. No timetable for lifting the restriction was given.
After the recalls -- which included 850,000 units in Brazil -- Inmetro intensified its inspection on all toys arriving in the country. The government body said, however, that there were no reported cases of any "accident involving a consumer of these products in Brazil."