China’s `Toy Story’ Gets Even Grimmer

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The tale of China’s tainted exports—from pet food to Thomas the Tank Engines and Barbie Dolls — turned even grimmer today. Southern Metropolis, a Guangzhou based daily, reported that Cheung Shu-hung, the owner of Lee Der Industrial Co., the Hong Kong based company that had shipped toys containing lead paint to Mattel, the maker of Barbie dolls and other wildly popular goods for tots, was found dead at his company’s factory in the Chinese province of Guangdong. The apparent cause: suicide.
Mattel had had a reputation in China as a careful, responsible customer, one that tried to make sure its suppliers paid reasonable (by China’s standards) wages to its employees and paid a lot of attention to quality control. That’s why news last month of the lead paint scandal was so surprising. It made a lot of people—from typical toy buying parents to the CEO’s of major multinational companies—wonder just how bad the quality problems in China might be. If Mattel was getting shoddy, dangerous products, who wasn’t? The question wasn’t necessarily fair—hundreds of companies with high quality reputations source or make products in China without incident (Apple Computer, Panasonic, Emerson Electric, Intel…the list goes on). But the question was out there nonetheless, and most of them were directed at Lee Der Industrial, who made many of the toys—including Sesame Street characters like Big Bird, as well as Tickle Me Elmo and Dora the Explorer—that were tainted with lead. Mattel had publicly identified Lee Der as its supplier on August 8 and announced that it had cut it off as a supplier. Subsequently, the Chinese government announced that the company was under investigation, and was banned from exporting anything until that investigation was complete. It might as well have hung a “going out of business’ sign on Lee Der’s front gate.
It’s not yet clear, definitively, that Mr. Cheung committed suicide. More will come out on this story in the next day or two. Extraordinarily, the Wall Street Journal reports in its story on the incident today that “people at Mattel say Chinese officials are upset that the American company has `disgraced the name of China,’ according to this person.” (See entire story here http://online.wsj.com/article/SB118699838250495806.html?mod=hps_us_whats_news).
If that’s true, it’s alarming beyond belief. Mattel “disgraced the name of China” by recalling products tainted with lead paint, supplied by a Guangdong manufacturer? To date it had seemed that the Chinese authorities had understood that they needed to get in front of these quality scandals, and help restore ebbing confidence in low end Chinese suppliers in the global market place. Is that really true? Or is Beijing really calling customers on the carpet to berate them for calling attention to tainted goods. Like millions of others, I’d really like to know. My three year old daughter’s got a lot of toys—but her absolute favorite is Dora the Explorer, made by Lee Der Industrial. She still gets to keep her Dora books, and the DVD’s, and the coloring book. But the Dora doll itself?
We threw that out last week.

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