Mattel, which makes toys in China announced today that it is recalling millions of toys because the ones made in China have too high lead content in the paint. (don't have a link--just saw it on a monitor)

The mysteries of how China manufactures so cheaply may not be as simple as their ultra efficiency after all, eh?

The labor market there is boiling over, the experts predicted this years ago. My guess is Chinese companies are squeezing-sneaking bad stuff into production because of rising labor prices.

Will they produce toys in the US or Tiawan again? Where is the final frontier for cheap labor?

I agree,heard about this on NPR this morning. I don't think pushing out crap products at the speed of light is ultra efficient when the crap has to get re-called.....what is efficient is someone on our end catching this contaminated crap. Glad i don't work in a pediatricians office today...Elmo kicked to the curb.

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

My guess: Africa

This is nothing new. Attempts to leapfrog to high production at any cost has plagued China for a long, long time and will continue until production quotas are abandoned in favor of quality, and the average worker or factoryman can feed and house themselves without having to work an 80+ hour week.

Mao's "Great Leap Forward" provides a good example and the name ittself is a clue to the government's dogma. One goal of the Great Leap was to greatly increase industrial production. Quality wasn't the issue and China's backyard furnaces produced record levels of totally substandard and useless steel.

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Never a dull moment at Berry Hill Farm.

It's the new math: Charge America to export its toxix waste to your country, then convert said toxic waste into products to sell back to America.

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-Marty

1986 300E 220,000 miles+ transmission impossible
(Now waiting under a bridge in order to become one)

Reading your M103 duty cycle:
http://www.peachparts.com/shopforum/831799-post13.html
http://www.peachparts.com/shopforum/831807-post14.html

"Glow in the Dark Elmo"

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

Don't worry he has got fireproof asbestos stuffing.

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-Marty

1986 300E 220,000 miles+ transmission impossible
(Now waiting under a bridge in order to become one)

Reading your M103 duty cycle:
http://www.peachparts.com/shopforum/831799-post13.html
http://www.peachparts.com/shopforum/831807-post14.html

Not until there is political stability to protect investments and guarantee production. Africa is still far too volatile. Same can be said for some of the poorer nations in the Caribbean. If there was ever political stability in Haiti it could become a great low-cost manufacturer. Even if labour costs were a little higher, your delivery costs would be way lower and your supply chain maybe a week shorter.


This, unfortunately, is what you get when the drive to cut costs and maximize shareholder value goes too far. Fisher Price has such a powerful brand image based on being trustworthy that this could do irreperable harm to them in the short to mid term.

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Jonathan

2011 Mazda2
2000 E320 4Matic Wagon
1994 C280 (retired)

Wonder what happens if you scratch-n-sniff?

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

take labor to china to save money,then have to recall all these toys.wouldn't it have been cheaper to just do it here in the first place???

Final frontier is anybody's guess. Next frontier is already beginning to boom: Vietnam.

Contract manufacturer I work with in China (Shunde, to be exact) is already losing business - some big, big tech electronics companies have started the move.

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1961 220b: first project car - sold.
2000 CLK 430: first modern Benz - sold.
2001 CLK 55: OMG the torque!!! - sold
1972 280SE 4.5: Baby Gustav
1991 300TE 4Matic: Gretel the Snow Bunny - sold
1978 300SD: Katz the Free Man - given away
1980 Redhead: Darling Wife

Yes and no. If you are talking of a few products, you are right. However, if you play the odds, you get away with it. Just like insurance. If you insure 5 people and one of them claims, you are screwed. Insure enough people and you are safe.

You see one product being recalled. However, 10000 are fine.

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01 Ford Excursion Powerstroke
99 E300 Turbodiesel
91 Vette with 383 motor
05 Polaris Sportsman 800 EFI
06 Polaris Sportsman 500 EFI
03 SeaDoo GTX SC Red
03 SeaDoo GTX SC Yellow
04 Tailgator 21 ft Toy Hauler
11 Harley Davidson 883 SuperLow

Well, if you are a shareholder, do you ever look at anything besides the bottom line?

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01 Ford Excursion Powerstroke
99 E300 Turbodiesel
91 Vette with 383 motor
05 Polaris Sportsman 800 EFI
06 Polaris Sportsman 500 EFI
03 SeaDoo GTX SC Red
03 SeaDoo GTX SC Yellow
04 Tailgator 21 ft Toy Hauler
11 Harley Davidson 883 SuperLow

Product liability lawsuits are pretty expensive in the US, don't you think? What could that do to the bottom line here? Think about how large that class action group would be. Was it something like 1.5 million toys recalled? That is a lot of lead paint for children to be ingesting.

Wise investors look to balance profits with mitigating risk. Even if no law suit materializes from this, there is bound to be damage to the brand image. This will result in reduced sales, perhaps just in the short term, but it will still have an impact. How much Dora and Diego stuff do you think flew off the shelves at Toys R Us this week? The results for next quarter are going to be down, and the shareholders will feel that right away.

I sure as hell wouldn't want to be a Fisher Price executive this morning. If I was a shareholder I'd be out for blood at the next annual meeting, for exposing my investment to that kind of risk in return for savings of a few pennies per production unit. Failure to perform due diligence costs money.

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Jonathan

2011 Mazda2
2000 E320 4Matic Wagon
1994 C280 (retired)