August 16, 2007 / 12:02 AM / 12 years ago

Hasbro intensifies testing after Mattel recalls

NEW YORK (Reuters) - Hasbro Inc. HAS.N, the world’s second-largest toymaker, on Wednesday said it is intensifying safety checks on its toys following a second major recall by industry leader Mattel Inc. MAT.N of Chinese-made toys within the last two weeks.

Assistant Manager of Kinder Haus Toys Laura Grossi removes toys from the store's shelves in Arlington, Virginia, August 14, 2007.REUTERS/Jim Young

As Hasbro looks to beat industrial malfeasance to the punch, it said its toys will undergo a rigorous testing process similar to the “three-point” check system Mattel disclosed on Tuesday, after the company recalled millions of toys due to lead paint and hazards from small, powerful magnets that can cause serious internal injuries if swallowed.

In addition to the “tremendous” amount of employees Hasbro has on the ground in China monitoring its manufacturers, any paint used on its toys will be tested before, during and after the various stages of production, Hasbro spokesman Wayne Charness told Reuters.

The company’s toys will also be subjected to an increased number of random checks, Charness said.

“We’ve always had a policy where if vendors don’t follow protocol, we’re not going to do business with them,” Charness said. And “we’ve always had a very stringent safety practice in place for lead.”

In June, RC2 Corp. RCRC.O recalled Chinese-made wooden Thomas & Friends toy trains sold in the United States because some of them contained lead paint.

More than 80 percent of toys on U.S. store shelves are made in China, according to the Toy Industry Association, a fact that has many companies and consumers on alert.

HASBRO AND CHINA

Hasbro does not own any toy plants in China and relies entirely on contractors for its production there. Mattel owns five Chinese toy factories, but not Lee Der Industrial Co., which made the 1.5 million preschool toys that were recalled across the globe earlier this month.

Most of Hasbro’s toys are made in China; Wedbush Morgan Securities analyst Sean McGowan said this fact may actually help the maker of Transformers and Star Wars action figures prevent tainted toys from ever reaching a child’s hands.

“Knowing that they are more vulnerable, they have put in layers of testing that they might not have if they weren’t using contract manufacturers,” McGowan said.

“It may happen at some point that Hasbro or some other company winds up with a manufacturing issue, but they feel pretty confident that they’ve got the kinds of systems in place that would catch anything.”

Under its new “three-point” check system, Mattel said it would require every batch of paint at each of its vendors to be tested and said it would increase the number of random inspections of its factories. The toy maker also said it would test each production run of its toys.

Jim Silver, editor-in-chief of Toy Wishes magazine, said every major toy company is taking a hard look its manufacturing to ensure there are no problems for the holiday season, the most crucial selling period for toy companies.

“All the major companies are overseas right now looking at their factories and literally testing like they’ve never tested before,” Silver said. “Everybody is over there checking. Nobody really wants an issue for the fourth quarter and they realize the importance of meeting all safety standards.”

Shares of Hasbro rose 32 cents to close at $27.61 a share on the New York Stock Exchange, while Mattel slipped 45 cents to $22.55 following the recall.

For more details on the toys being recalled, go to here on the CPSC Web site.

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