Mattel Inc. has steadily built its "industry standard" reputation for quality over time and is known for having sophisticated inspection and testing systems at many of its China factories to guard against flawed or tainted products. Yet its reputation for being a conscientious toymaker is facing a battle on two fronts as it has issued two massive recalls in as many weeks, the second being yesterday.

The first worldwide recall of the year, earlier this month, affected 967,000 Nickelodeon and Sesame Street toys from Fisher Price (acquired by Mattel in 1993), covering 83 types of toys distributed in 32 countries, including figures of such popular characters as Big Bird, Elmo, Ernie, Cookie Monster, Dora the Explorer and Diego.

Add to that list yesterday's announced recall of a quarter-million "Sarge" toy cars from the Walt Disney Co. movie Cars, as well as Barbie, Batman, Doggie Day Care and Polly Pocket.

The Sarge cars are believed to contain dangerous levels of lead paint, and the other four items, involving more than nine million toys sold over the last four years, were recalled primarily because they include millions of tiny magnets that can be deadly if swallowed. If swallowed, the magnets could attract each other and cause intestinal perforation, infection or blockage, which can be fatal. (Mattel recalled about 2.4 million Polly Pocket play sets last November after receiving 170 reports of magnets becoming dislodged. Since the previous recall announcement, Mattel has received more than 400 additional reports of magnets coming loose.)

Internationally, nearly 19 million toys are being recalled, the company said. All the toys were manufactured in China, according to the U.S. Consumer Product Safety Commission (CPSC).

Damage Control
The latest recall of almost $20 million worth of Chinese-made toys continues to raise big questions about 21st century quality control.

With so many China-produced exports entering countries all over the world and so many safety-related recalls, there are growing worries about just who is responsible for checking and guaranteeing the safety of products manufactured overseas and not just toys.

Mattel is battling on two fronts to contain the fallout from increasingly more toy recalls, moving to quickly revamp safety measures at Chinese manufacturing plants even as it seeks to protect the company's reputation among consumers and investors.

The Wall Street Journal reports:

Mattel also pledged to significantly increase the frequency of its paint inspections, testing every batch delivered to every vendor, in order to prevent lead paint from being used in its toys. And it sought to assure Wall Street that its new quality-control regime won't adversely affect holiday sales.

The company said it was working with the safety commission and other regulatory agencies worldwide, as well as with retailers to remove the affected products from stores.

Moreover, Mattel is trying to combat the recent bad news by assuring parents that it understands what is at stake. Chief Executive Robert Eckert, for instance, filmed a video apology to parents that was distributed online.

"I can't change what has happened in the past, but I can change how we work in the future," he said, noting that he has four children of his own. In his video, posted on the Mattel Web site and Yahoo yesterday, Eckert said that "absolutely nothing is more important than the safety and well-being of our children."

The company also purchased full-page ads in The New York Times, The Wall Street Journal and USA Today.

Yet even as Mattel has done a pretty good job in trying to soothe various constituencies, it warned that further recalls could be announced. Mattel faces a long road ahead as it prepares for the holiday season with a question mark hovering over its reputation.

Effective Recalls
Perhaps it's time to revisit the CPSC's recall checklist for how manufacturers can conduct a comprehensive and effective product recall:

Production

• Identify defect/safety issue;
• Stop production;
• Isolate inventory to be recalled;
• Determine appropriate remedy;
• Test replacement/repair;
• Repair/Dispose units on hand and units returned under the recall;
• Discuss all aspects with compliance staff;
• Redesign future production to eliminate hazard;
• Change model/serial number for redesigned product; and
• Where product changes are made to existing products, label so as to distinguish from recalled products.

Key Points

• Remedy should be easy for consumer so as to encourage correction;
• Submit timely monthly progress reports on the number of products; corrected and notification measures implemented to CPSC, and continually review for additional actions;
• Support CPSC publicity efforts;
• Be responsive to individual customer needs;
• Designate a key company official to take care of special needs;
• Stay on message (with language agreed to in joint press release);
• Don't blame the consumer;
• Consult frequently with compliance staff working with you on the recall to avoid problems; and
• Be creative and original in an effort to reach as many consumers and other owners of the recalled product.

Over the past two months, there have been at least two intentional deaths on the production/approval side of Chinese-made goods: former director of China's State Food and Drug Administration (SFDA) Zheng Xiaoyu was executed in July, with approval by the Beijing Supreme People's Court, for taking bribes and for dereliction of duty in drug safety; and Mattel's recall of more than a million toys earlier this month drove a Hong Kong-based Mattel subcontractor to commit suicide over the weekend.

Image credit: Wall Street Journal