CHINA: Thomas & Friends Toy Maker Discusses Lead Paint Problem

Curt Stoelting, the chief executive of RC2, concedes that the links in the Thomas & Friends supply chain broke down as it crossed the ocean. Since the toy manufacturer based in Oak Brook, Ill., discovered lead paint on a Thomas train in April, RC2 has tried to strengthen its safety safeguards in China, Mr. Stoelting said last week in his first interview since the June recall.

"We've always required our suppliers to follow our safety specifications," Mr. Stoelting said. "In this incident, those requirements were not met."

He said RC2 fired both the vendor who made the lead paint and the company that made the wooden toys.

Unlike Mattel, RC2 does not own any of its factories. Instead - like many United States toy makers operating in China - the company works with a local network of contract manufacturers, supplemented by 175 RC2 employees stationed there.

RC2 officials would not provide the names of the paint maker and contract manufacturer responsible for the lead paint problem, but when asked whether those companies would be paying damages to RC2, Mr. Stoelting said the company was evaluating its options.

About 40 percent of the 1.5 million toys that were recalled in June had been returned as of July 11. RC2 is mailing customers new toys and reimbursing their postage. HIT Entertainment, the owner of the Thomas brand, has not canceled its deal with RC2, nor have other media companies that let RC2 make toys based on their characters, Mr. Stoelting said. ("Thomas & Friends" is a popular television program shown around the world.)

"We're still moving forward with our Thomas product lines," he said. "Our goal is to use this incident to really improve our procedures, improve our safeguards."

Mr. Stoelting said that RC2 was now requiring lead testing of every batch of paint used on the Thomas toys. And the company has increased the number of times it checks incoming supplies and outgoing toys for problems. The company is also hiring an independent auditor to conduct checks, though RC2 executives have not decided whether to release the auditor's reports to the public, Mr. Stoelting said.

Executives at the Toy Industry Association's toy safety conference in Guangzhou, China, last week said that RC2 had also tried to join the group since its recall.

"We'd like to help them, frankly, if they'd accept our help," said Carter Keithley, president of the association in New York. "I think what we're going to want to do is have some conversations with RC2 to learn more about the steps they are taking to clean up this mess."

AMP Section Name:Manufacturing
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