Wednesday, September 05, 2007

Head of Chinese Toy Company Said to Kill Himself

Published: August 13, 2007

SHANGHAI, Aug. 13 — The head of a Chinese company that was behind the recall earlier this month of more than a million Mattel toys committed suicide over the weekend, China’s state-controlled media reported today.

Zhang Shuhong, a Hong Kong businessman and owner of the Lee Der Industrial Company, a company that made toys for Mattel for 15 years, hanged himself in a company warehouse in Foshan, in southern China, the Southern Metropolis Daily said today.

There was no independent confirmation of the suicide. A person who answered the phone at Lee Der’s office in Foshan City, near Guangzhou, immediately hung up.

A spokeswoman for Mattel, which is based in El Segundo, Calif., released a statement this morning that said “We were saddened to learn of this tragic news.”

The death is the latest development in a year filled with prominent recalls and product safety scandals involving goods that were made in China.

Mattel, which makes Barbie dolls and Hot Wheels cars, recalled more than a million toys worldwide after discovering that they were coated with lead paint. The recall was one of the largest this year and included 83 types of toys, including Sesame Street and Dora the Explorer characters made under the Fisher-Price brand and sold worldwide.

A string of troubling recalls of Chinese-made products this year has heightened trade tensions between the United States and China and created a public relations disaster for China, whose economy and trade surpluses are growing at a blistering pace.

Experts here say many Chinese factory owners — often under intense pressure to lower production costs — cut corners in making products and regularly use cheap and illegal substitutes. And indeed, in several of the recalls involving China this year, the government says companies intentionally used cheap or illegal substitutes.

For instance, after the United States announced one of the largest pet food recalls in history, Chinese regulators said they found that two makers of food ingredients here intentionally added an industrial chemical called melamine into the feed to save money and artificially increase the protein count. Instead, they created a toxic potion that sickened or killed thousands of animals.

Faced with growing criticism over the quality and safety of its food, toys, tires and other products, China has vigorously defended the quality of its goods, insisting products made here are on par with products made in the United States and Europe.

But the government, acknowledging some continuing problems, has also vowed to overhaul its food safety system, to crack down on companies that counterfeit and sell tainted products and to severely punish those responsible for damaging the country’s image and its booming exports drive.

Just last week, regulators in Beijing revoked the export licenses of the two toy manufacturers, including Lee Der, because of their roles in recalls. Earlier this year, the RC2 Corporation of Illinois recalled 1.5 million Thomas & Friends toy railway sets because they were also coated with lead paint. One of its suppliers, the Hansheng Wood Products Company, also had its license revoked.

Beijing regulators said they revoked Lee Der’s license because it used paint contaminated with excessive levels of lead, which could be poisonous and pose of health dangers to children.

The government said in an announcement last week that Lee Der’s paint supplier had shipped Lee Der a fake, lead-free paint pigment that could be used in producing paint. The government said it was investigating the sale of fake lead-free pigment in China.

In an interview earlier this month, Mattel’s chief executive, Robert A. Eckert, said the company Mattel later identified as its supplier, Lee Der, “is a vendor plant with whom we’ve worked for 15 years; this isn’t somebody that just started making toys for us.”

In its report today, Southern Metropolis said that Lee Der officials said Mr. Zhang received the leaded paint from a company controlled by a close friend.

China now makes about 80 percent of the world’s toys and many of the world’s biggest brand name companies, including Mattel, Hasbro and McDonald’s, use contract toy manufacturers in China.