Last year at about this time, the toy giant Mattel was up to its ears in recalled toys - more than 20 million of them to be specific. Not a good posture for a toy company right before Christmas.
Nevertheless, there’s an argument to be made that Mattel caught something of a PR break out of the incident – or more accurately the series of incidents. I haven’t seen Mattel’s polling on it, but my hunch is that if you ask people what they remember from last year’s toy recalls, two things would come up: Chinese manufacturing and lead paint. Both of those things are on target, but they don’t quite tell the story. Eighty percent of toys sold in the United States are imported, primarily from China. Indeed, Mattel contracted with a Chinese company to produce more than a million toys that Mattel ended up recalling because the paint used had lead in it – dangerous stuff for anyone, but particularly children. (It turns out that because China produces more lead than any other country, lead paint is actually cheaper there than safer varieties.)
Chinese manufacturing took the public blame, at least here in the United States. And it deserved a lot of it. One reason the Chinese took the fall, PR-wise, was that it wasn’t the first time a Chinese product had been deemed outrageously unsafe. Stories about melamine being intentionally introduced into dog food to fake higher protein levels had been in the media for several months before lead-tainted toys turned up in the news.
So the public was primed to blame Chinese manufacturing, and it deserved plenty of blame.
But to be fair, so did Mattel – not just because they should have detected the lead paint in the toys and kept them off of store shelves, but also because many more Chinese-manufactured toys were called back because they contained small magnets that could detach easily enough for children to swallow them. More than 18 million Mattel toys were recalled because of the magnets, after one child died from swallowing a magnet, and 19 more kids required surgery.
At first, the company left the blame on China’s doorstep, but then Mattel’s executive vice president of worldwide operations traveled to China to apologize, and make clear that the magnet problem was due to Mattel’s own design. "Mattel takes full responsibility for these recalls and apologizes personally to you, the Chinese people and all of our customers who received the toys," Thomas Debrowski, Mattel's executive vice president of worldwide operations, publicly acknowledged to a Chinese official. "But it's important for everyone to understand that the vast majority of those products that we recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in Chinese manufacturers." (See news stories here , and here.) And yet, the public perception of the incident, the perception that lingers, is that the problem was all China’s – because that’s what fit the existing media narrative. It’s hard to know if the company sees it this way, but that public misperception is just Mattel’s good luck.
Another institution that deserved more scrutiny than it got as a result of the incident was the Consumer Product Safety Commission, the federal agency charged with protecting consumers from just such unsafe products. How did the toys get past CPSC? As CPR Member Scholars William Funk, Thomas McGarity, Nina Mendelson, Sidney Shapiro, David Vladeck, and Policy Analyst Matthew Shudtz make clear in CPR’s latest report, The Truth About Torts: Regulatory Preemption at the Consumer Product Safety Commission, CPSC isn’t nearly what it once was, and nowhere close to what it should be. The agency remains badly hamstrung by Reagan era deregulation, forced to follow manufacturer-friendly rules when contemplating recalls. But more than that, it was and remains starved of resources. Adjusted for inflation, the agency’s budget is now about half of what it was in the 1970s – and that’s not because there are fewer products on the market or less cause for worry about safety. It’s because a collection of Congresses and a passel of Presidents simply haven’t seen fit to invest in product safety.
So, as CPR Member Scholars Rena Steinzor and Sidney Shapiro point out in a forthcoming book, The People’s Agents: Reviving Health, Safety and Environmental Potection, when Mattel was importing its millions of lead-laden and small-magnet-bearing toys, CPSC had all of 15 inspectors in the whole country spot-checking billions of imports, and exactly one employee testing toys – and that only by dropping them on the floor to see if and how they shattered.
To make matters unbearably worse, corporate lawyers, with a boost from CPSC itself, have begun arguing in court that CPSC regulations preempt litigation filed by victims of unsafe products. If CPSC hasn’t banned a product, manufacturers would have us believe, then victims can’t sue for harm the products may cause.
It’s a sorry legal argument, and it makes for even worse policymaking. Such litigation helps the public learn about unsafe products, helps provide CPSC with valuable information it could use to regulate if it were so inclined, and gives companies like Mattel added incentive to make sure their products are safe – even if they’re imported.
As it happens, last week, Mattel reached a settlement with 39 states over the unsafe toys, agreeing to shell out $12 million to end state enforcement actions. The company still faces lawsuits from parents of children harmed by the toys, who will get not a penny of the $12 million, and need to sue on their own to recover damages. Those are precisely the sorts of suits that the industry is now taking aim at with its preemption arguments.
The hard truth here is that while many Americans imagine that products on American shelves are safe, the agency charged with making that so lacks the resources and structure to do the job, and manufacturers – with help from CPSC itself – are working hard to make sure they are unaccountable in court. For all those reasons, it’s a pity that Mattel got away with as little media damage as it did. If the media had given it the share of the blame it deserved, the company might now be a poster child for a stronger product safety enforcement.