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Mattel in another toy recall

The horror story does not seem to be going away for Mattel and China. In the third episode of the series dealing with lead-contaminated toys, Mattel has had to announce the third recall within a month of toys due to lead contamination. Mattel has announced the recall of 800,000 toys (Barbie accessories sold between October 2006 and August 2007, units of the GeoTrax locomotive line sold between September 2006 and August 2007 and Big Big World 6-in-1 Bongo Band toys sold between July through August 2007). This comes after the last recall announced on August 14th where Mattel recalled around 19 million toys worldwide. Compared to the August 14 recall, the current recall is much smaller, but the impact will be huge; the reputation of Mattel (and China) will go down further and parents will be even more scared (including of the prospect of whether new toys are also contaminated).
Mattel did announce earlier that more recalls would happen since the company is doing a more thorough investigation into its Chinese procurement and does a more careful monitoring of production. However, it is difficult to quantify the damage that Mattel faces due to the three recalls, but the impact on its toy sales is considered to be significant. It’s not only Mattel though since a majority of toys worldwide are made in China, and one cannot rule out buyers now looking at toy tags to examine whether they are made in China. For China, which has made attempts to try and get over these scandals, this recall comes at a bad time. Whatever they may say, a reputation of bad quality control takes time to go away.

Mattel Inc.’s reputation took another hit after the world’s largest toy maker announced a third major recall of Chinese-made toys in little more than a month because of excessive amounts of lead paint. The latest action, which involved about 800,000 toys and which was announced late Tuesday, is yet another blow to Mattel. The news, along with other recent recalls of tainted Chinese toys from other toy makers, could also make parents even more nervous about shopping for toys this holiday season.
Robert Eckert, chairman and chief executive of El Segundo, Calif.-based Mattel, warned at a press conference last month that there may be more recalls of tainted toys as the company steps up its investigations into its Chinese factories and increases monitoring of production.
For information about Tuesday’s recalls, consumers should call Mattel at 888-496-8330 or visit the company’s Web site at http://www.service.mattel.com

Mattel will now be fervently hoping that this is the last time it faces a situation like this. Mattel would have had to face a significant cut on revenues due to these recalls, what with the cost related to recall, as well as the cost due to lower sales. What makes this situation even more uncomfortable for parents is that toys are something that children get involved with fairly significantly, with very close contact and the prospect of lead contamination is a very scary thought.

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