Mattel’s Robert Eckert Plays By His Own Rules

Posted on September 5, 2007
by Maureen Keene

Oh, Mattel. I held such high hopes for you. You seemed so different from the other toymakers. Maybe I bought into the hype of Mattel setting the gold standard for doing business in China. Maybe it simply stems from my childhood love of all things Barbie. Either way, CEO Robert Eckert’s attitude toward product safety tears it.

Yesterday, the Wall Street Journal reported that Mattel has not conducted recalls in a timely manner in accordance with Consumer Product Safety Commission regulations because, apparently, Mr. Eckert thinks he is above the law:

Mattel Chairman and Chief Executive Robert Eckert said in an interview that the company discloses problems on its own timetable because it believes both the law and the commission’s enforcement practices are unreasonable. Mattel said it should be able to evaluate hazards internally before alerting any outsiders, regardless of what the law says.

…

The CPSC doesn’t agree. “It’s a statute; it’s clear,” said Julie Vallese, the commission’s spokeswoman, referring to the 24-hour rule. Yet enforcing such rules poses a challenge for the small agency, which has limited resources and is only authorized to impose fines of less than $2 million against companies that Ms. Vallese says “think they can get away with delaying reporting.”

According to the article, Mattel has been fined twice since 2001 for withholding information about product hazards. The company was fined $1.1 million for not reporting a fire hazard in its Power Wheels motorized ride-on cars for years, even though they had received reports of 150 fires caused by the cars in addition to 1,500 reports of overheating, melting and short-circuiting.

Mattel’s Mr. Eckert says the company recalled the kiddie cars and agreed to pay the penalty to get the issue behind it. “We investigate every fire. We don’t know of a single fire caused by Power Wheels,” he said. Even so, the company altered its Power Wheels line by installing a new fuse and other parts.

If Mattel didn’t know of any fires, why has the company paid damages to victims?

What’s worse, even though Mattel recalled 10 million of the cars in 1998, “settled” the fine with the CPSC, and claimed to fix the problem, reports of the cars catching fire continued for at least seven more years.

Sonya DeAngelo, a real-estate agent from Portland, Ore., says she lost the detached garage in a house she rented when a Power Wheels truck she bought for $500 caught on fire two hours after her grandson had gotten off. The fire buckled the surrounding asphalt.

“The toy was completely melted, except for the frame,” she recalled. Though her landlord was insured, Ms. DeAngelo was without renter’s insurance and says she couldn’t afford an attorney to pursue legal action against Mattel. Last year, Mattel paid her $2,500, half of what Ms. DeAngelo had asked for to cover her losses.

A grandmother paid $2,500 out of her pocket because of a combustible Mattel car while Robert Eckert collected a $2.5 million bonus last year. Does that seem fair?

On top of this, Mattel’s third major recall of the summer was announced today — more lead paint on toys made in China, including items from the company’s flagship brand, Barbie. According to the Law and More blog:

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.

My only remaining hope where Mattel is concerned is that consumers will make a statement against the company’s irresponsible business practices this holiday season and boycott Mattel and its subsidiary Fisher-Price. It’s on consumers now — if we buy as usual, companies like Mattel will continue conducting (dangerous) business as usual.

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