Mattel's (NYSE: MAT) Fisher division is recalling about a million toys. The products contain (subscription required) high levels of lead.
Oh, and the products were made in China. Mattel says it did not catch the problem earlier because they were made by a "trusted" manufacturer.
Most of the toys have not been shipped from warehouses.
Mattel's problems raise the issue of whether US companies are going to have to spend increasing sums of money to audit Chinese manufacturing processes and inspect products from that country as they come to the US market. The current recall is part of an emerging epidemic of serious concerns about items manufactured in the world's most populated country.
That brings up the P&L question of whether out-sourcing manufacturing to Chinese companies is really less expensive over time. If Chinese work quality is too low for most US companies. the cost of monitoring and inspecting these products could sky-rocket. And, this could off-set the advantage of China's cheap labor force.
Made in China may come to mean too much cost and too much risk for many US firms.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
8-02-2007 @ 3:31PM
Debbie said...
It may cost more to produce in the USA but we definitely have the best quality control, we care about what we do. It's about time that all manufacturers bring their products back home where they belong. Look how great it would be for our economy, would drop the unemployment level, fewer people receiving public assistance and food stamps. Is there anything better than made in the USA?? In the defense of China, they cannot be held responsible for parts being to small that children will choke on them, they did not design the toys, only manufactured as per their instructions.
8-02-2007 @ 6:51PM
rosew said...
If these companies would stop outsourcing and keep the jobs in the America where they belong we wouldn't be having these problems.How much money did Fisher-Price save ?
8-02-2007 @ 8:03PM
hugh said...
Many companies are paying a hefty price by having cheap labor making goods for them in China. With all the recent recalls, how much are these money hungry companies really making. I feel the american people should just stop buying goods made in China, better still, boycott the companies that do use this cheap labor. Buy american.
8-03-2007 @ 12:51PM
Moonzie said...
It won't completely off-set the advantage of China's cheap labor force.
Mattel's problems were found and both China & US should set about improving. Inspecting should be one of the import processes. Regard this as and warn to promote goods quality. Anti-China trade or boycott won't be the way to solve the promblems.
There would be a reason for people who outsourcing to China.While China will fight on the anti-dumping claims, it will also continue to review and revise its own trade structure to improve its trade balance (and international relations)
Say, U.S.A. needs to strengthen the export of China in order to guarantee its trade balance from the other side.
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to begin your business trip of China.
8-07-2007 @ 1:30AM
danefran said...
what is more important our children or cheap labor? time we bring back our outsoursing to our own country so we can make a living. companies may get cheap labor but it still cost us the top dollar to buy the product and we the unemployed can't afford to buy it. plus getting unsafe products