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Mattel Chief Battles For Company's Image

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The Associated Press

Published: September 8, 2007

LOS ANGELES - In the seven years since CEO Robert Eckert took over Mattel, the world's largest toy maker has gone from struggling with sagging sales and unhappy shareholders to a more profitable company.

Now, the man credited with that turnaround is on the defensive, forced to explain to Congress how some of his decisions resulted in three high-profile recalls this summer involving millions of Chinese-made, lead-tainted toys not long before the holiday shopping season begins.

'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?' said Linda Bolton Weiser, analyst with Oppenheimer & Co. 'Why wasn't he aware that there appears to be a quality and monitoring and testing issue in his company?'

Eckert, 53, declined an interview request from The Associated Press.

Among other things, he put the company back on track by closing what was then Mattel's last U.S. factory in Kentucky in favor of shifting more production at less expensive plants and subcontractors in China and Mexico.

The move was in line with what Mattel and other toy companies had done for decades. More than 80 percent of toys sold in U.S. stores are made in China, and other toy makers have been stung recently by recalls of Chinese-made products.
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. About 65 percent of Mattel's toys are made in China, but the toy maker has stood out among its rivals because it owns many of its factories there. About 50 percent of Mattel's production in China is produced in company-owned plants.

Apparently, the controls were not strong enough, and the string of recalls has left Mattel fighting to maintain its reputation as company shares have fallen about 9.4 percent since Aug. 1, the date of the first recall. Mattel stock fell 62 cents, or 2.8 percent, to $21.30 Friday.

In a little more than a 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.

In response to the problems, Mattel said it has stepped up testing of its toys and oversight of subcontractors in China and promised consumers that problems would be quickly found and fixed.

Eckert has been front and center throughout the effort, issuing public apologies and trying to reassure parents during TV interviews or on videos posted on Mattel's Web site.

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