MATTEL RECALLMATTEL RECALL

By Jackie, Tashunda, Sandra By Jackie, Tashunda, Sandra and Eddieand Eddie

Mattel HistoryMattel History In 1945 Ruth and Elliot Handler and Harold “Matt” Masson In 1945 Ruth and Elliot Handler and Harold “Matt” Masson

launched Mattel out of a garage workshop in Southern launched Mattel out of a garage workshop in Southern California. California.

In 1960 Mattel became a publicly owned company.In 1960 Mattel became a publicly owned company.

1997 Mattel merged with Tyco, the third largest toy company 1997 Mattel merged with Tyco, the third largest toy company in the world, resulting in the Sesame Street License.in the world, resulting in the Sesame Street License.

May 2000 under the leadership of Bob Eckert Mattel unveiled May 2000 under the leadership of Bob Eckert Mattel unveiled a new vision with a clear focus on building brands, cutting a new vision with a clear focus on building brands, cutting costs and developing people.costs and developing people.

Mattel TodayMattel Today

World’s Largest Toy CompanyWorld’s Largest Toy Company Toy Lines Include Barbie, Hot Wheels, Toy Lines Include Barbie, Hot Wheels,

Harry Potter and American Girls, Fisher-Harry Potter and American Girls, Fisher-PricePrice

Toys are produced in company-owned Toys are produced in company-owned manufacturing facilities in China, manufacturing facilities in China, Indonesia, Malaysia, Mexico, Thailand, as Indonesia, Malaysia, Mexico, Thailand, as well as through independent contractors well as through independent contractors located in United States, Europe, Mexico, located in United States, Europe, Mexico, the Far East and Australia. the Far East and Australia. 

Mattel LeadershipMattel Leadership

Current CEO – Bob EckertCurrent CEO – Bob Eckert MBA from Kellogg School of MBA from Kellogg School of

Management Management 23 years with Kraft Foods becoming 23 years with Kraft Foods becoming

CEO CEO Joined Mattel in May 2000, replacing Joined Mattel in May 2000, replacing

“the flamboyant” Jill Barad as “the flamboyant” Jill Barad as President and CEO President and CEO

Mattel Leadership continuedMattel Leadership continued

Bob Eckert has a Transformational Bob Eckert has a Transformational leadership styleleadership style

Innovative, productive, and Innovative, productive, and committed to organizational learningcommitted to organizational learning

Concerned with socialization of new Concerned with socialization of new employeesemployees

Creative strategies to overcome the Creative strategies to overcome the uncertainties of adjustment to new uncertainties of adjustment to new organizational cultureorganizational culture

Mattel RecallsMattel Recalls Mattel's difficulties stem from two sources: lead paint and small Mattel's difficulties stem from two sources: lead paint and small

magnets.magnets.

On August 2On August 2ndnd, the company announced a recall of approximately , the company announced a recall of approximately 1.5 million Fisher-Price toys that contain lead paint- including 1.5 million Fisher-Price toys that contain lead paint- including Ernie, Elmo, Dora the Explorer and Big Bird.Ernie, Elmo, Dora the Explorer and Big Bird.

August 14, 2007 Mattel announces recall for 9 million more August 14, 2007 Mattel announces recall for 9 million more Chinese made toys, including popular Barbie, Polly Pocket and Chinese made toys, including popular Barbie, Polly Pocket and “Cars” movie items, and warned that more could be come “Cars” movie items, and warned that more could be come because of lead paint and tiny magnets that could be swallowedbecause of lead paint and tiny magnets that could be swallowed

On September 5On September 5thth, Mattel announces a third recall of Chinese toys, , Mattel announces a third recall of Chinese toys, saying it would take back more than 800,000 units globally that saying it would take back more than 800,000 units globally that contain "impermissible" levels of leadcontain "impermissible" levels of lead

Mattel Recalls cont.Mattel Recalls cont. About 65% of Mattel's toys are made in China, with half of those toys About 65% of Mattel's toys are made in China, with half of those toys

made in Mattel owned plants and the rest in about a dozen made in Mattel owned plants and the rest in about a dozen vendor factories. According to the company the problems occurred after its vendor factories. According to the company the problems occurred after its Chinese contractor subcontracted the painting of the toys to a supplier that Chinese contractor subcontracted the painting of the toys to a supplier that

used inferior and unauthorized products.used inferior and unauthorized products. Those inferior and unauthorized products being lead. If lead is ingested it Those inferior and unauthorized products being lead. If lead is ingested it

can lead to developmental problems in children or the fetus of pregnant can lead to developmental problems in children or the fetus of pregnant women.women.

Consumer Reaction to RecallConsumer Reaction to Recall

According to the Harris poll:According to the Harris poll: 91% of adults are aware of a toy recall91% of adults are aware of a toy recall 33% of adults will stop buying toys 33% of adults will stop buying toys

manufactured in chinamanufactured in china 31% of adults threw out a toy impacted by 31% of adults threw out a toy impacted by

recallrecall 13% of adults returned the toy for a refund13% of adults returned the toy for a refund Of all the adults that believe a recalled toy Of all the adults that believe a recalled toy

is in their home, only 55% have discarded is in their home, only 55% have discarded the toythe toy

Government Reaction to RecallGovernment Reaction to Recall Senate Hearing with Consumer Product Safety Commission Senate Hearing with Consumer Product Safety Commission House Bill being proposed to increase fines from $1.25 M to House Bill being proposed to increase fines from $1.25 M to

$100 Million$100 Million The bill, headed next for the House floor, would also require The bill, headed next for the House floor, would also require

more independent safety testing of products, wider use of more independent safety testing of products, wider use of tracking labels and better recall procedures. tracking labels and better recall procedures.

The California attorney general and Los Angeles city The California attorney general and Los Angeles city attorney filed a lawsuit against 20 companies, including attorney filed a lawsuit against 20 companies, including Mattel, accusing them of knowingly exposing children to Mattel, accusing them of knowingly exposing children to lead and failing to provide warning of the risk.lead and failing to provide warning of the risk.

If the suit is successful, the complaint says the companies If the suit is successful, the complaint says the companies could pay a $2,500 fine for each violation. could pay a $2,500 fine for each violation.

Mattel’s Response & ResolutionMattel’s Response & Resolution Bob Eckert wrote and published an opinion statement that was published in Bob Eckert wrote and published an opinion statement that was published in

the September 11, 2007 issue of the Wall Street Journalthe September 11, 2007 issue of the Wall Street Journal On September 21st Mattel apologized for damaging the reputation of On September 21st Mattel apologized for damaging the reputation of

Chinese goods admitting it targeted some good goods that were up to Chinese goods admitting it targeted some good goods that were up to scratch. In addition the chairman and CEO Robert Eckert apologized by scratch. In addition the chairman and CEO Robert Eckert apologized by continuously publicizing its recalls the including the example above. continuously publicizing its recalls the including the example above.

““We are by no means perfect. The company could have done a better job We are by no means perfect. The company could have done a better job overseeing subcontractors in China that produced more than 21 million overseeing subcontractors in China that produced more than 21 million recalled toys. ” recalled toys. ”

As a result of the recalls Mattel will now require that every batch of paint As a result of the recalls Mattel will now require that every batch of paint from every vendor be tested for lead, that random inspections be instituted from every vendor be tested for lead, that random inspections be instituted and that every production run of finished toys be checked for compliance. and that every production run of finished toys be checked for compliance.

Consumer Response to MattelConsumer Response to Mattel

Observers see the CEO's apology as a welcome action compared to companies in the past that Observers see the CEO's apology as a welcome action compared to companies in the past that have initially failed to acknowledge a problem or tried to shift the blame on others. "High have initially failed to acknowledge a problem or tried to shift the blame on others. "High profile public apologies are a good idea for two reasons" says Jaques deLisle "First, they tend profile public apologies are a good idea for two reasons" says Jaques deLisle "First, they tend to get the word out even more effectively about the recall. Seocnd, many studies show that to get the word out even more effectively about the recall. Seocnd, many studies show that victims of harm often do care a great deal about an apology and may actually settle for less victims of harm often do care a great deal about an apology and may actually settle for less money if the defendant apologizes and atones rather than denies liability.“money if the defendant apologizes and atones rather than denies liability.“

Believability of Mattel CEO Bob Eckert Believability of Mattel CEO Bob Eckert http://mccorgbehaviormattelrecall.pbwiki.com/YouTube+videos+-+Mattel+recallshttp://mccorgbehaviormattelrecall.pbwiki.com/YouTube+videos+-+Mattel+recalls

"A lot of what is happening is pushback towards China, and there are those in other nations "A lot of what is happening is pushback towards China, and there are those in other nations who are happy to take potshots at the country over this," says Dr. David Strutton, director of who are happy to take potshots at the country over this," says Dr. David Strutton, director of UNT's New Product Development Scholars Program.UNT's New Product Development Scholars Program.

It's clear that China is to blame for the problems with the toys, just as Chinese vendors were to It's clear that China is to blame for the problems with the toys, just as Chinese vendors were to blame for recalls of products earlier this year. In March, many brands of dog and cat foods blame for recalls of products earlier this year. In March, many brands of dog and cat foods were pulled from shelves because they contaminated rice protein from a source in China that were pulled from shelves because they contaminated rice protein from a source in China that was identified as being associated with kidney failure in pets. In June, the U.S. Food and Drug was identified as being associated with kidney failure in pets. In June, the U.S. Food and Drug Administration announced it would block sales of Chinese catfish, basa, dace, shrimp and eel, Administration announced it would block sales of Chinese catfish, basa, dace, shrimp and eel, after repeated testing turned up contamination with drugs not approved in the U.S. for farmed after repeated testing turned up contamination with drugs not approved in the U.S. for farmed seafood.seafood.

Group’s RecommendationsGroup’s Recommendations

The real challenge for Mattel is to improve it’s image. One The real challenge for Mattel is to improve it’s image. One way this can be done is by making a massive effort in the area way this can be done is by making a massive effort in the area of quality control by instituting new safety-check systems.of quality control by instituting new safety-check systems.

Secondly, Mattel should have massive educational Secondly, Mattel should have massive educational campaigns.  For example, they could consider publishing campaigns.  For example, they could consider publishing information about toys and how children should play with information about toys and how children should play with them safely.them safely.

Lastly, manufacturing labels that include where all toy parts Lastly, manufacturing labels that include where all toy parts were manufactured and materials that have gone into the toys were manufactured and materials that have gone into the toys should be placed prominently on all toy packaging.should be placed prominently on all toy packaging.

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