Mattel Apologizes to China Over Recalls

Thomas A. Debrowski, Mattel's executive vice president for worldwide operations, left, meets with Chinese product safety chief Li Changjiang during his visit to the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) office in Beijing Friday, Sept. 21, 2007. U.S. toy giant Mattel issued an extraordinary apology to China on Friday over the recall of Chinese-made toys, saying most of the items were defective because of Mattel's design flaws rather than faulty manufacturing. (AP Photo/Andy Wong) (Andy Wong - AP)

LOS ANGELES -- Mattel Inc. tried to save face Friday with Chinese officials, taking the blame for the recent recalls of millions of Chinese-made toys as it strives to mend a strained relationship with the nation that makes most of its toys and fattens its profit.

The world's largest toy maker sent a top executive to personally apologize to China's product safety chief, Li Changjang, as reporters and company lawyers looked on.

"Mattel takes full responsibility for these recalls and apologizes personally to you, the Chinese people, and all of our customers who received the toys," Thomas A. Debrowski, Mattel's executive vice president for worldwide operations, told Li.

The unusual move reflects how invested El Segundo-based Mattel has become in China.

"Mattel certainly must have been facing some pressure to do that, because you can't imagine why they would be trying to push this story along any further," said Eric Johnson, a professor of operations management at Tuck School of Business at Dartmouth College.

He suggested Mattel may want to prevent China from imposing more taxes or regulations.

"China's embarrassment in all this could lead to that, and I think they were trying to head that off with this apology," Johnson said.

Peter Navarro, a business professor at the University of California, Irvine, and the author of "The Coming China Wars," also suggested Mattel was trying to avoid punitive measures.

"Mattel is worried that the Chinese government is going to make it difficult for them to produce, put their costs up and hurt their stock price," Navarro said.

Mattel did not immediately respond to a call seeking further comment.

Company stock has fallen from the mid-$23 level following the first recall in early August to a low of $20.97 on Sept. 10. Shares have since rebounded, increasing 38 cents, or 1.6 percent, to $23.94 on Friday.

The apology came ahead of an expected visit to China by Mattel's Chairman and Chief Executive Robert A. Eckert. The timing of the trip has not been announced.