No reason to put Mattel on the rack
Saturday, 22 September 2007
John Gapper
Mattel was in the dock last week, apologising profusely and promising to do better. It took some time to round up the usual suspect - a big US corporation - after it emerged that some of its Chinese-made toys were decorated with lead paint. Mattel broke cover just when it seemed as if China would get the blame.
The maker of Barbie dolls and Fisher-Price toys did not actually do anything terribly wrong. No child has been shown to have suffered because one of its Chinese suppliers broke its rules by using lead paint rather than the safer kind. It has said "sorry" in textbook fashion and tightened up procedures in China to make it harder for any batch of toys not made to its standards to slip through.
But Bob Eckert, Mattel's chairman and chief executive, blundered by arguing that it was right not to tell regulators about toys that could be dangerous until it had made its own inquiries. He told The Wall Street Journal that it was unreasonable to expect Mattel to obey the letter of the law and tell the Consumer Product Safety Commission immediately there was any question of a toy being hazardous because this "might apply to almost anything".
The public opinion cops switched on their sirens. The Journal reported that Mattel had twice been fined by the CPSC, an unloved and under-funded body, for failing to report potential hazards promptly. The New York Times' anti-big business editorial page thundered that Mr Eckert's statement was "arrogant and dangerous". The Mattel boss was hauled before a Senate committee last week for the customary public thrashing.
Mr Eckert's mistake was to turn attention away from what Mattel is doing to make things better to the question of whether it is trustworthy. He also reinforced the stereotype of big corporations being shifty and secretive. As Eric Dezenhall, a public relations consultant who specialises in product recalls, puts it: "Corporate self-defence always has a whiff of malfeasance about it."
Mr Dezenhall divides these events into two categories: a "sniper crisis" and a "character crisis". The first, such as the 1982 recall of Tylenol painkillers after seven people died when a lunatic spiked bottles of pills, is an emergency for which a company is not to blame, even if it might have done more to prevent it. The second kind, notably the Enron, Arthur Andersen and Firestone cases, results from carelessness, wrongdoing or arrogance in a corporation.
The second kind of crisis is harder to solve because the company is suspected of being villain rather than victim. Instead of being regarded as an enterprise that tried to impose its safety standards on Chinese suppliers, even if it failed, Mattel was accused of proceeding as it thought fit because it saw itself as being above the law.
This notion was reinforced by a recall that it announced at the same time as the lead paint emergency: the withdrawal of 18m toys containing small high-energy magnets. Mattel started putting these magnets into toys five years ago and announced an initial recall last year after it emerged that they could tear children's intestines if swallowed. The CPSC is investigating whether it acted rapidly enough to disclose the problem.
So should we declare Mr Eckert guilty as charged? Despite Mattel's unwise foot-dragging in the past (and even, pace The New York Times, a bit of arrogance) I think not. His argument - that Mattel is better at identifying unsafe toys than the CPSC - was tactless but correct.
Even the regulator tacitly admits this. Nancy Nord, the CPSC's acting chairwoman, describes its testing laboratory outside Washington DC as "an incredibly inefficient facility" in which only one man is employed full-time to test toys. Compared with Mattel, or any other big maker, the CPSC is hopelessly under-resourced and it is unclear what good it would actually do for every manufacturer to tell it constantly about possible flaws in thousands of toys.
Naturally, there are calls for the CPSC, a regulatory minnow compared with bodies such as the Food and Drug Administration, to be better funded and equipped. Those with hammers tend to see nails and the Senate appropriations committee was keen to do some appropriating last week after it grilled Mr Eckert and others. There was talk of paying for additional inspectors both to test toys in laboratories and to examine them as they arrive at US docks.
Let us get serious: not only is the CPSC never likely to return to its glory days of 1,000 employees but the chance of it being able to take over the job of front-line surveillance of safety from toy makers is zero. Nor would it be a good use of public money. Just as the FDA tells drugs companies how to run clinical trials rather than doing so itself, the CPSC provides more bang for the taxpayer's buck by prodding companies such as Mattel to operate safely.
It may be that, in the good old days that some people recall regretfully, regulators had more employees and were better-resourced. But I bet that the "Made in Hong Kong" toys in my London house when I was a child were not half as safe as the "Made in China" Mattel ones that clutter my New York house now.
One reason for this improvement is that, when corporations do not behave themselves now, they tend to suffer a dressing-down that is far worse for their chief executives than a slap on the wrist from a regulator used to be. Perhaps the Senate should give a bit of money to the CPSC but it need not splash out too much. Mr Eckert had a safety drill last week and it did not cost the taxpayer a cent.
Mattel was in the dock last week, apologising profusely and promising to do better. It took some time to round up the usual suspect - a big US corporation - after it emerged that some of its Chinese-made toys were decorated with lead paint. Mattel broke cover just when it seemed as if China would get the blame.
The maker of Barbie dolls and Fisher-Price toys did not actually do anything terribly wrong. No child has been shown to have suffered because one of its Chinese suppliers broke its rules by using lead paint rather than the safer kind. It has said "sorry" in textbook fashion and tightened up procedures in China to make it harder for any batch of toys not made to its standards to slip through.
But Bob Eckert, Mattel's chairman and chief executive, blundered by arguing that it was right not to tell regulators about toys that could be dangerous until it had made its own inquiries. He told The Wall Street Journal that it was unreasonable to expect Mattel to obey the letter of the law and tell the Consumer Product Safety Commission immediately there was any question of a toy being hazardous because this "might apply to almost anything".
The public opinion cops switched on their sirens. The Journal reported that Mattel had twice been fined by the CPSC, an unloved and under-funded body, for failing to report potential hazards promptly. The New York Times' anti-big business editorial page thundered that Mr Eckert's statement was "arrogant and dangerous". The Mattel boss was hauled before a Senate committee last week for the customary public thrashing.
Mr Eckert's mistake was to turn attention away from what Mattel is doing to make things better to the question of whether it is trustworthy. He also reinforced the stereotype of big corporations being shifty and secretive. As Eric Dezenhall, a public relations consultant who specialises in product recalls, puts it: "Corporate self-defence always has a whiff of malfeasance about it."
Mr Dezenhall divides these events into two categories: a "sniper crisis" and a "character crisis". The first, such as the 1982 recall of Tylenol painkillers after seven people died when a lunatic spiked bottles of pills, is an emergency for which a company is not to blame, even if it might have done more to prevent it. The second kind, notably the Enron, Arthur Andersen and Firestone cases, results from carelessness, wrongdoing or arrogance in a corporation.
The second kind of crisis is harder to solve because the company is suspected of being villain rather than victim. Instead of being regarded as an enterprise that tried to impose its safety standards on Chinese suppliers, even if it failed, Mattel was accused of proceeding as it thought fit because it saw itself as being above the law.
This notion was reinforced by a recall that it announced at the same time as the lead paint emergency: the withdrawal of 18m toys containing small high-energy magnets. Mattel started putting these magnets into toys five years ago and announced an initial recall last year after it emerged that they could tear children's intestines if swallowed. The CPSC is investigating whether it acted rapidly enough to disclose the problem.
So should we declare Mr Eckert guilty as charged? Despite Mattel's unwise foot-dragging in the past (and even, pace The New York Times, a bit of arrogance) I think not. His argument - that Mattel is better at identifying unsafe toys than the CPSC - was tactless but correct.
Even the regulator tacitly admits this. Nancy Nord, the CPSC's acting chairwoman, describes its testing laboratory outside Washington DC as "an incredibly inefficient facility" in which only one man is employed full-time to test toys. Compared with Mattel, or any other big maker, the CPSC is hopelessly under-resourced and it is unclear what good it would actually do for every manufacturer to tell it constantly about possible flaws in thousands of toys.
Naturally, there are calls for the CPSC, a regulatory minnow compared with bodies such as the Food and Drug Administration, to be better funded and equipped. Those with hammers tend to see nails and the Senate appropriations committee was keen to do some appropriating last week after it grilled Mr Eckert and others. There was talk of paying for additional inspectors both to test toys in laboratories and to examine them as they arrive at US docks.
Let us get serious: not only is the CPSC never likely to return to its glory days of 1,000 employees but the chance of it being able to take over the job of front-line surveillance of safety from toy makers is zero. Nor would it be a good use of public money. Just as the FDA tells drugs companies how to run clinical trials rather than doing so itself, the CPSC provides more bang for the taxpayer's buck by prodding companies such as Mattel to operate safely.
It may be that, in the good old days that some people recall regretfully, regulators had more employees and were better-resourced. But I bet that the "Made in Hong Kong" toys in my London house when I was a child were not half as safe as the "Made in China" Mattel ones that clutter my New York house now.
One reason for this improvement is that, when corporations do not behave themselves now, they tend to suffer a dressing-down that is far worse for their chief executives than a slap on the wrist from a regulator used to be. Perhaps the Senate should give a bit of money to the CPSC but it need not splash out too much. Mr Eckert had a safety drill last week and it did not cost the taxpayer a cent.