Mattel: the U.S. company scandal story
On August 2, 2007, the Mattel Corporation recalled hundreds of thousands of toys which were made in China under the Fisher-Price label. These recalled Fisher-Price toys, which were manufactured by Lee Der Industrial. Some of these toys were found to have been coated in paint containing excessive levels of lead, particularly from lead paint, has been cause to health problems in children, brain damage, and even death in children. 1.5 million toys were recalled from American stores such as Toys R Us and Walmart.
The Mattel Company sent investigators to China. Mattel identified Lee Der Industrial company as the main supplier of the lead paint tainted toys. China immediately suspended the company's export license which had a devastating effect on the company's business. According to press reports, Lee Der Industrial stood to lose as much as $30 million dollars due to the Fisher-Price toy recall scandal.
Mattel tracked down three paint suppliers who worked for the Lee Der company - Dongxin, Zhongxin and Mingdai. Each of these three companies had supplied paint to factories which were contracted to make Mattel products, including Fisher-Price
Mattel believes that specifically, the Mingdai company sold yellow paint pigment containing lead to Dongxin and Zhongxin, which produced the paint. The paint was then used by Lee Der, operated by Zhang Shuhong, to produce Mattel's line of Fisher price products.
It is believed that a personal friend of Zhang's ran the company who supplied the lead paint, which ultimately led to the Mattel recall and the financial ruin of Lee Der Industrial. It has been speculated that Zhang Shuhong felt demoralized by the scandal and pos ...