Mattel CEO in Crisis Management Mode After Toy Recall

Mattel Inc. CEO Robert Eckert is facing Congress – and angry parents across the country – to explain how some of his decisions resulted in the high-profile recalls of Chinese-made, lead-tainted toys.

The Associated Press’ Alex Veiga says analysts are questioning why Eckert wasn’t aware of the company’s lead problems and reviewing Eckert’s crisis management strategy in the meantime.

“The real issue or question lies with not so much how he’s handling it all, but how the heck does this happen on his watch?” Linda Bolton Weiser, analyst with Oppenheimer & Co., told Veiga. “Why wasn’t he aware that there appears to be a quality and monitoring and testing issue in his company?”

According to Veiga, Mattel and other toy companies have been moving operations to China for decades. “More than 80 percent of toys sold in US stores are now made in China, and other toy makers have also been stung recently by recalls of Chinese-made products,” Veiga says. “But Mattel has taken more of a beating because of the scope of its recalls and the fact that it had cultivated an image of being an industry leader when it came to controlling its production in China.”

For the past month, Mattel has recalled more than 21 million Chinese-made toys worldwide over worries that they were tainted with lead paint or contained small magnets that could be swallowed by children. Mattel says it has stepped up testing of its toys and oversight of subcontractors in China while promising consumers’ problems would be quickly found and fixed.

“In a kind of crisis management view, he’s done that pretty well,” Eric Johnson, a professor of operations management at Dartmouth’s Tuck School of Business, told Veiga. “The part that’s unfortunate is this most recent recall . . . It just shows this is a problem deep in the supply chain, and it takes a while to root it out.”

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