It has been a summer of discontent for the toy industry, on both sides of the Pacific, in the US and China. Product design and quality issues have dealt a body blow to an industry that affects a huge proportion of the population in the US, and provides a great deal of employment in China.
Product recalls, for one reason or another, have hamstrung the US toy industry, and its Chinese suppliers have taken it on the chin. Large-scale media coverage and unkind jokes on the nightly comedy talk shows have created a near panic about toys, as a lot of mistaken information has been passed around and blown up beyond all proportion.
Less than 1 per cent!
Some of the flak is deserved, but quite a lot is over-hyped, as always happens with issues involving children, especially their health and safety. Since over 70 per cent of the world''''''''''''''''''''''''''''''''s toys are manufactured in China, it is important to understand the facts.
It simply is not true that most toys suffer from poor design and quality. The fact is that all of the toys recalled so far in 2007, despite their number running into millions, is less than 1 per cent of the 3 billion toys sold in the US each year. There are hundreds of toy brands, but only four account for 75 per cent of all the products recalled. And just two of these four had 54 per cent of the toys recalled for excess lead in the paint.
Design, not manufacturing
Another misconception is that China is the main culprit. That is simply not true. Companies manufacture and sell products, and import or export them; countries don''''''''''''''''''''''''''''''''t. The Consumer Product Safety Commission correctly holds those who order the toys and bring them into the US responsible for their safety. Besides, the fact is that about 74 per cent of the toys recalled were for design-related issues, not manufacturing defects or lead in the paint. Those who order the toys are principally responsible for the design, not those who manufacture them.
Is China responsible for the loss of American jobs in the toy industry? Not really. China is just the latest country where toy production is cheapest, because lower labour costs mean lower prices for consumers. Toy production started moving out of the US over 50 years ago, to Japan. Taiwan, Korea and other Asian countries next dominated worldwide toy production, as Japanese wages rose. It was only in the mid-1980s, when Korean and Taiwanese wages went up, that China began exporting toys.
Code of conduct
A number of political commentators have pilloried the US toy industry for being so focused on reducing costs that it is willing to use factories that mistreat their workers. This is only partly true. The International Council of Toy Industries (ICTI) has a code of business practices that obligates its members to treat workers fairly. A comprehensive system called the ICTI CARE process has been developed, to ensure that factories adhere to the prescription of the code.
Most big toy makers require their suppliers to adopt the code. In the past three years, nearly 1,200 factories employing over a million workers have entered the programme. Its seal of compliance is issued only to factories that comply with the prescribed standards. The problem is usually when these factories sub-contract work to suppliers within their own countries that are not signatories to the code. But, as pointed out above, this group constitutes just around a quarter of the year''''''''''''''''''''''''''''''''s toy recalls.
Following this year''''''''''''''''''''''''''''''''s brouhaha, the US toy industry has decided to put into place a comprehensive conformity assessment programme, which will be in full operation by next year. Once this is underway, the US will have the best toy safety testing standards and procedures in the world.
One worldwide set of safety standards and safety testing procedures would ensure that all countries adhere to one proven standard. That way, parents everywhere would have an ironclad assurance that the toys they give their children are safe. Someone needs to take the initiative for this.