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Mattel apologizes to China over recalls

It may be trying to avoid punitive measures.

LOS ANGELES - Mattel Inc. tried to mend relations Friday with officials in China, taking the blame for the recent recalls of millions of Chinese-made toys.

The world's largest toymaker sent a top executive to personally apologize to China's product safety chief, Li Changjang, as reporters and company lawyers looked on.

"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 A. Debrowski, Mattel's executive vice president for worldwide operations, told Li.

The unusual move reflects how invested El Segundo-based Mattel has become in China, which makes most of its toys and fattens its profits.

"Mattel certainly must have been facing some pressure to do that, because you can't imagine why they would be trying to push this story along any further," said Eric Johnson, a professor of operations management at Tuck School of Business at Dartmouth College.

He suggested Mattel may want to prevent China from imposing more taxes or regulations.

"China's embarrassment in all this could lead to that, and I think they were trying to head that off with this apology," Johnson said.

Peter Navarro, a business professor at the University of California, Irvine, and the author of The Coming China Wars, also suggested Mattel was trying to avoid punitive measures.

"Mattel is worried that the Chinese government is going to make it difficult for them to produce, put their costs up and hurt their stock price," Navarro said.

In a prepared statement issued later Friday, the company said some media accounts of its meeting with Chinese officials had been mischaracterized.

"Since Mattel toys are sold the world over, Mattel apologized to the Chinese today just as it has wherever its toys are sold," the company said.

Mattel stock has fallen from the mid $23 level following the first recall in early August to a low of $20.97 on Sept. 10. Shares have since rebounded, increasing 38 cents, or 1.6 percent, to $23.94 on Friday.

The apology came ahead of an expected visit to China by Mattel's chairman and chief executive Robert A. Eckert.

Mattel ordered three high-profile recalls this summer involving more than 21-million Chinese-made toys because of concerns about lead paint or tiny magnets that could be swallowed.

Mattel previously said many of the toys were recalled because of design problems. It also said certain vendors in China or their subcontractors violated Mattel's rules by failing to use safe paint or to run tests on paint.

On Friday, Debrowski acknowledged that the "vast majority of those products that were recalled were the result of a flaw in Mattel's design.

Li upbraided Mattel for maintaining weak safety controls and reminded Debrowski that "a large part of your annual profit ... comes from your factories in China."

[Last modified September 22, 2007, 00:08:58]