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Insider: Lessons from the Toy Aisle

Chinese toy recalls are a warning for automakers and regulators as the lure of low-cost manufacturing puts safety at the forefront.

The past few months have seen a series of stunning recalls—not from the auto industry, but from childrens’ toy manufacturers. Mattel—maker of Barbie and Fisher Price brands—called back more than 18 million toys this summer after discovering numerous safety gaffes, including the use of lead-based paint and high-power magnets that could be swallowed. Hasbro recalled some of its signature Easy Bake ovens due to the possibility of causing third-degree burns, while RC2 Corp. pulled 1.5 million copies of its Thomas & Friends railroad toys off the market. All of these toys have one thing in common: Made in China. In fact, more than 26 million toys made in China have been recalled in the past two years, according to a study by the AFP news service.

It appears the Chinese toy suppliers cut corners when it came to producing products that met the detailed specifications provided by the toy manufacturers. For example, a decision was made over there to paint the toys with lead-based products despite the specs from Mattel. Whether other recalls that stretch beyond toys are likely to pop up in the future is uncertain, but it appears that this practice is not isolated. Case in point: These latest recalls followed the disturbing discovery that millions of pounds of pet food were contaminated with wheat gluten from China containing traces of melamine, a chemical used as fertilizer in Asia but banned in the U.S. Several dogs and cats died as a result. Anyone getting concerned yet?

The fallout from these product defects have resulted in Congressional hearings, with top executives from Mattel and toy retailers forced to face the glare of bright lights and pointed questions from politicians trying to score points with voters to keep their jobs. (We all know there’s nothing more obnoxious than a politico whose job is on the line.) “I, like you, am deeply disturbed and disappointed by recent events,” a red-faced Robert Eckert, chairman of Mattel, told a Senate committee. “These recalls have been a personal disappointment to me.” These are not comments that any corporate leader wants to express publicly, especially when the reasoning behind the outsourcing of manufacturing these toys was to save a few bucks.

Could it be that drivers and passengers of future vehicles produced in China—Chrysler has already sealed a deal with Chery to build cars in China for export into various markets, including the U.S.—may be equally at risk as America’s children and pets? One just has to view the disturbing crash test video compiled by Germany’s ADAC auto club in June when it conducted a 40-mph offset frontal crash test on a Chinese-made Brilliance BS6 sedan to realize we could be in for some serious problems if China doesn’t get its act together when it comes to product safety. In the video, which can be viewed on a number of websites, the A-pillar collapses, forcing the driver’s side door out of its frame while the sill buckles and the windshield folds like a piece of paper. ADAC technicians had to use a crowbar to open the doors after the test and determined the pedals intruded more than 18 in. and the IP moved 8 in., causing massive injuries to the dummy. A similar test of Jiangling Motors’ Landwind SUV displayed equally disturbing results. Is there a pattern here?

It’s not hard to jump to conclusions when the evidence is stacked this high. As the auto industry embraces Chinese partners for potential vehicle manufacturing solutions in the future to reduce costs, careful attention needs to be paid to what has happened to Mattel and others in order to avoid some of America’s other business icons—Ford, GM and Chrysler—from being dragged into a similar problem. Before jumping into a potential catastrophe, U.S. regulators and automakers that partner with Chinese manufacturers must make sure the vehicles imported from China are safe and reliable. If they fail to assure any vehicle meets exacting safety standards the likelihood will be fatal not only for the occupants, but the automaker as well.

 

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