Mattel announces third Chinese toy recall

(Adds CPSC comments and names producers of recalled toys)

NEW YORK, Sept 4 (Reuters) - The world's leading toymaker, Mattel Inc MAT.N, on Tuesday announced a third recall of Chinese-made toys, saying it would take back more than 800,000 units globally that contain "impermissible" levels of lead.

The latest recall involves three Fisher-Price toy models and eight Barbie brand playsets. No Barbie dolls were included.

In total, 522,000 U.S. toys and 322,000 outside the United States are being recalled. The toys were shipped between Aug. 3, 2006, and July 31, 2007, the company said.

A spate of toy recalls has sparked concern over the quality of products made in China.

The U.S. House of Representatives' subcommittee on commerce, trade and consumer protection is to hold a Sept. 19 hearing on how to protect U.S. children from imported products containing lead paint -- which has been linked to health problems in children, including brain damage.

The recall follows Mattel's investigation of its toys manufactured by vendors in China. In the last five weeks, the company already announced two recalls of millions of Chinese toys due to excessive amounts of lead paint and other dangers.

"Mattel, along with the U.S. Consumer Product Safety Commission and other companies, is doing a systematic inventory of products that may contain lead paint," said CPSC spokeswoman Julie Vallese. "This is the result of Mattel's review."

Vallese warned that consumers may see more recalls for lead paint violations.

Mattel Chief Executive Robert Eckert said he could not guarantee there would be no further toy recalls, but stressed that the testing of products it promised after the first major recall on Aug. 1 was now complete.

"You can never say never ... that there won't be more (recalls)," Eckert said in a telephone interview. "But we've clearly now tested all the toys Mattel makes at vendor plants overseas."

He said Mattel is now using only certified paint on toys, monitoring its own plants and those of subcontractors, and that every product is tested before it reaches stores.

"The toys retailers will stock for this holiday season will be of the very highest quality," he said.

In the latest recall, Mattel instructs people to go to its Web site (www.service.mattel.com) to establish whether they own an affected toy. After they fill out a form and send back the affected parts, Mattel will send them replacement and bonus parts.

Mattel faces increased costs because of the testing programs, but Eckert said the effect on earnings was "immaterial."

The company already said it would adjust second-quarter results to include a charge of about $30 million related to recall and testing costs. Mattel reports third-quarter earnings around the middle of October.

OFF THE LIST

Mattel said the playsets affected by the latest recall were produced by Holder Plastic Company, a Mattel contract vendor, which subcontracted the painting of miniature toy pets and small furniture pieces to Dong Lian Fa and Yip Sing.

The two companies used uncertified paint and are no longer producing toys for Mattel, the toymaker said.

The company has faced questions recently over whether it acted quickly enough in announcing last month's recalls of more than 19 million toys due to lead paint and hazards from small magnets that can be swallowed and cause injury. The recalled toys included Pixar Sarge die-cast toy cars and Sesame Street and Fisher Price toys.

Earlier on Tuesday, the CPSC disagreed with Eckert, who told the Wall Street Journal that the company preferred initially to investigate reports of dangerous toys without informing the agency.