Perhaps I'm just jaded, but Mattel apologizing to China was a bit surreal.
Mattel Apologizes to China Over Recall:
Mattel apologized to China for damage to the country's reputation and said its own "design flaw" is responsible for the vast majority of recalled toys.In its apology, the world's largest toy maker said its own "design flaw" was responsible for the biggest recall by far, involving around 18 million playsets studded with potentially dangerous magnets.
While soothing China's pride, the apology could make Mattel a target in lawsuits. "I can't think of any other instance where" a major toy company "has actually come out with such a public announcement of a defect," said Andrew Krulwich, a former general counsel for the U.S. Consumer Product Safety Commission who now practices at Wiley Rein LLP.
Coming from a company with a history of fighting liability accusations, the move also suggests the escalating diplomatic and public-relations pressure Mattel faces around the world.
Chinese officials have ratcheted up criticism recently of Mattel and U.S. regulators, believing they are putting too much blame on China in the recent recalls of toys and other Chinese-made products. Mattel's apology is a reminder that U.S. companies dependent on business in China offend Beijing's government at their peril.
Mattel, which gets 65% of its products from China, quietly began to mend fences three weeks ago. In a letter dated Sept. 1 on Mattel's corporate letterhead, Jim Walter, the company's senior vice president of world-wide quality assurance, wrote directly to the director of China's quality-control agency, Li Changjiang, to "address any possible misunderstandings." Mr. Walter wrote that Mattel has a "deep commitment to working together with the Chinese government," according to a copy of the letter seen by The Wall Street Journal.
Mattel is very worried about pissing off the generator of a major portion of its profits - namely exploitative factory labor in China.
US firms in China often pressure local factories to make things cheaper and faster - at all costs. Often US firms purposely take a blind eye and look away from "how" their products are being made. They know that bad things are going on. If you check other industries besides toys I think you will find much worse actions from US companies. The management teams in China are not the same guys you and I deal with in the US - they are the Americans of the worst sort- looking for cheap, almost slave labor and then will blame everyone besides themselves if things hit the fan. There is only one culprit here - and that's Mattel itself. They made the money. They looked away. They should take the heat.
you are right - the pressure to cut costs is the key here. And the spread between what goods (toys, electronics, etc) cost to manufacture in China (or elsewhere that labor is cheap) and what the same goods cost in the US is usually an outrageous profit margin.