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So Long, Farewell, Auf Wiedersehen, Goodbye August 16, 2007

Posted by gregquill in Uncategorized.

No, no, not me. Hasty Ruminations will be around a little while longer.

This is about Mattel.  My favorite toy company as a lad in the 1950’s. And a company who earned a lot of my money when I was raising my three sons and a daughter. Then, they started sending more and more work overseas in the ’60’s and 70’s, to combat rising costs in the U.S. and to grab some windfall profits from cheap Asian labor.

Then, they sent almost all manufacturing to China, closing their U.S. plants, and greedily grabbing profits on top of profits.

Then, someone said, “Hey, our balance sheet will look a lot better to the analysts if we let China also do the quality inspections on the stuff they make. Paint, magnets, compliance to specs. Heck, we should just turn it all over to them, fire our U.S. quality department, and watch the stock hit the roof!”

So they did. They sent tapes on Juran and Demming to Bejing (it was called Peking in the olden days), and fired everyone on the U.S. payroll who knew anything about lead paint or poisonous magnets or sharp edges.

Now, it has all caught up with them, because they kept pressuring China to reduce costs (like Wal*Mart does every day to their suppliers), and clever Chinese managers started “stretching” the specs. Why pay $8 a gallon for certified lead free paint when you can get “sort of” lead free for $4? “Who will ever know?”, they ask in their best Inspector Clouseau voice.

So Mattel has a recall in the works for millions of toys across many brands (including Tomy, Barbie Dolls, Fisher Price and others) as the Christmas build begins.

Standard and Poors has not downgraded Mattel’s hold recommendation. Yet.

So, should we bail Mattel out? Not as far as I am concerned. They told thousands of Americans to apply for unemployment, and millions of American consumers that they are just worry warts about product safety. I say build a Mattel museum, let their stock go to zero, and let some sharp American entrepeneurs start building good toys again in this country. Let the Chinese close their toy factories, and send their workers to make Chinese airplanes and automobiles, markets in which people don’t worry so much about safety.   😉



1. Brenda - August 16, 2007

I blame Bush. Its the fashionable thing to do.

I’m just a little alarmed because my child played with plenty of Mattel toys…and not that long ago either!

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