Can the Mattel corporate brand and its Barbie product brand make it through a 3rd recall for high lead content on toys and Barbie accessories? This should be giving Mattel shareholders agita. In addition, the U.S. Consumer Product Safety Commission [CPSC] has its hackles up about what it perceives as foot-dragging by Mattel on annoucing recalls. This lead emergency may have just tipped over into something the company can't navigate with the traditional crisis-management tools.
This evening online, THE WALL STREET JOURNAL reports, "Mattel Inc. is on the verge of announcing another major toy recall, its third this summer." And as JOURNAL writer Nicholas Casey documents, it's another whopper and eats into Mattel's core Barbie brand. Expected to be recalled this Wednesday are 775,000 Mattel toys with unsafe levels of lead content. Two lines - a musical instrument and a train - are marketed to pre-school children. As for Barbie, seven Barbie accessories, totally 675,000 items, are expected to be recalled.
There's more. As Nicholas Casey and Andy Pasztor report in a separate THE WALL STREET JOURNAL article, the CPSC "says that manufacturers must report all claims of potentially hazardous product defects within 24 hours, with few exceptions." Mattel's, continues the writers, "own definition of such a timely response differs sharply from the government's - as Mattel openly acknowledges."
In three major cases, including last month's recall of 18 million playsets, Mattel delayed disclosure until it performed over a period of months its own information-gathering and internal analysis of complaints. Surprisingly or maybe this is part of a new crisis-management approach, Mattel Chief Executive Officer Robert Eckert came out and defended this timeframe because, Casey and Pasztor report, the company "believes both the law and the commission's enforcement policies are unreasonable." Twice Mattel has been fined for this. Twice it settled without admitting fault. Is Eckert, like the leaders at Merck and the former lead paint industry, deciding to push back vs. being a passive entity?
This clash over the timing of disclosure is potentially harmful to the reputation and credibility of both Mattel and the CPSC. We can expect hearings in Washington D.C. focusing on both parties. But the one which has the most to lose is Mattel. On the line is the brandname of the world's largest toymaker. Parents have to be asking: Does Mattel care about our children?
The Mattel situation could wind up as one of the best or worst handled product liability crises in American corporate history. No question, there are a lot of us Mattel-watchers now.
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