Tuesday, September 25, 2007

Mattel Official Delivers an Apology in China

September 22, 2007

Mattel, the world’s largest toy maker, apologized in China yesterday for its recalls of nearly 20 million Chinese-made toys this summer.

According to news accounts, Thomas A. Debrowski, Mattel’s executive vice president for worldwide operations, apologized to China for harming the reputation of Chinese manufacturers.

American politicians and others reacted in turn with criticism that Mattel was kowtowing to China, where the company manufactures 65 percent of its toys, many in partnerships with Chinese vendors.

Mattel challenged the news accounts of Mr. Debrowski’s meeting in Beijing, saying that they had mischaracterized his remarks. Mattel sent Mr. Debrowski to the meeting to apologize to consumers in China, not to manufacturers there, a spokeswoman said.

Mattel said in a statement: “Since Mattel toys are sold the world over, Mattel apologized to the Chinese today just as it has wherever its toys are sold.”

Mr. Debrowski’s remarks were not intended to address harm that has come to the reputation of Chinese-made products as Mattel and other companies recalled millions of toys, the spokeswoman said.

The company, long known for its high-quality manufacturing, is having a difficult time keeping critics at bay. Mattel was not the first to recall toys made in China this year because of lead paint, but its recalls have been the largest and most noticed. Retailers, media companies and government officials in the United States, Europe and China have expressed concern over the recalls. And analysts say the recalls have caused many consumers to worry about toys made in China.

Mr. Debrowski met yesterday at the office of Li Changjiang, the head of the General Administration of Quality Supervision, Inspection and Quarantine, in Beijing. Mr. Li pointed out to Mr. Debrowski that a large part of Mattel’s profits come from factories in China, according to the news reports.

“Our cooperation is in the interests of Mattel, and both parties should value our cooperation,” Mr. Li said, according to an account of the meeting by The Associated Press. “I really hope that Mattel can learn lessons and gain experience from these incidents.”

Chinese officials told Mr. Debrowski at the last minute that they would meet with him only if reporters could be invited, according to someone familiar with the meeting.

Mr. Debrowski’s comments at the meeting created a furor of criticism in the United States.

“It’s like a bank robber apologizing to his accomplice instead of to the person who was robbed,” Senator Charles E. Schumer of New York said in an interview. “They’re playing politics in China rather than doing what matters.”

In a draft of the remarks that Mr. Debrowski planned to make at the meeting, he clarified that 17.4 million of the nearly 20 million units recalled this summer were magnetic toys. Those toys, though produced in China, were recalled because of a design mistake by Mattel.

“Mattel does not hold Chinese manufacturers responsible for the design in relation to the recalled magnet toys,” according to Mr. Debrowski’s planned remarks, which Mattel released.

When Mattel recalled the magnetic toys in mid-August, the company said that those recalls were not caused by Chinese vendors, separating them from the more than 80 other styles of toys that were recalled because they were tainted with lead paint.

“They really mixed these issues,” said Dara O’Rourke, an associate professor of labor and environmental policy at the University of California, Berkeley.

Mr. O’Rourke said that Mattel had been more focused on public relations than on fixing its problems. He said that Mattel used China as a scapegoat for its own problems and that the toy maker is now paying the price.

“There’s no question that Mattel is still completely committed to operating in China and needs those factories,” he said. “There was a lot of scapegoating China, but I would argue that this was caused by a system that is designed to push down costs and speed up delivery. There are root causes and Mattel is behind those.”

Mattel executives said throughout the last six weeks that they recalled more units than necessary because they were being conservative. But Mr. Debrowski’s remark at the meeting that the recalls were “overly inclusive” was also controversial because it implied that Mattel was admitting that it had made the problem in China look larger than was actually the case.

While Mattel executives have blamed their vendor partners, they were saying in August that China was not to blame.

“I can’t say that it’s necessarily a China problem, because as I said we’ve been in China many, many years, and we haven’t had any problems. I think it’s a problem where you’ve got a vendor that wants to break the rules,” Mr. Debrowski said on Aug. 22. “A vendor can break the rules anywhere he wants to, in the United States or China.”

Management experts said that Mattel was in a difficult position with the messages that company executives have to deliver to keep its partners happy.

“They have relationships with suppliers; they have relationships with customers; they have relationships with governments and with investors,” said Steven Eppinger, the interim dean and a professor at the Sloan School of Management at the Massachusetts Institute of Technology. “But they cannot give them different messages.”

Mr. Eppinger said that it was more difficult to maintain good relationships with vendors abroad and that communications could be misunderstood more easily.

No comments: