Chinese workers are sick of making toxic cadmium batteries

Over the holidays, millions of American children received Chinese-made toys powered by cadmium batteries. Cadmium batteries are safe to use. They are also cheap, saving American parents about $1.50 on the average toy, compared with pricier batteries, but cadmium batteries can be hazardous to make as workers inhale the toxic red cadmium dust that filled the air in the plant.

As the U.S. and other Western nations tightened their regulation of cadmium, production of nickel-cadmium batteries moved to less-developed countries, most of it eventually winding up in China.

In America, five years after Hasbro stopped using nickel-cadmium batteries, Mattel and Toys "R" Us are yet to follow suit, but say they are exploring alternatives. Wal-Mart no longer purchases cadmium batteries from GP Batteries but declined to comment on whether it still uses them in its products.

Mattel says cadmium batteries have some performance advantages over alternatives, such as a better ability to retain a charge when not used for long periods.

Only this year, the European Union is banning the sale of nearly all cadmium batteries.

In China, government standards on cadmium exposure are in line with those endorsed by the World Health Organization. And without question, there are safe cadmium plants in China.

But having rules and enforcing them are two different things.

Source : The Wall Street Journal Asia

HASBRO Chairman Urges Global Toy Safety Standards -FT

Asking "why can't we have one mandatory global safety standard for toys?" , Hasbro Inc. Chairman Alan Hassenfeld urged regulators to adopt common global toy safety standards.
"If we had one standard for the entire world everyone would cheer because we're so confused (by the competing standards) and it's a huge cost."

Hassenfeld, who is also leading an effort to implement uniform labor and workplace safety standards through the International Council of Toy Industries initiative called the CARE initiative, said companies couldn't evade responsibility for product recalls, especially those related to design problems.

Mattel & Hasbro 2007 Financial Results Webcasts

Mattel will webcast its quarterly conference call on Thursday, January 31, 2008 at 8:30 a.m. Eastern time (5:30 a.m. Pacific time). The conference call will be webcast on the "Investors & Media" section of the company's corporate Web site, www.mattel.com. To listen to the live call, log on to the Web site at least 15 minutes early to register, download and install any necessary audio software. An archive of the webcast will be available on the company's Web site for 90 days and may be accessed beginning two hours after the completion of the live call.

Hasbro will webcast its quarterly conference call on Monday February 11, 2008 at 8:30 a.m. Eastern time (5:30 a.m. Pacific time).The conference call will be webcast on the "Investors Relations" section of the company's corporate Web site, www.hasbro.com. Click on "Corporate Information" on the bottom of the page and then click on "Investors," then click on the webcast microphone.

TOY SAFETY : Is 10% of the company value the right valuation ?

Click to see the graphs

Robert Eckert, CEO of Mattel, must be a reassured man by now... as the Mattel recently got through three massive recalls - and a resulting public relations mess - while it seems that the impact on the stock price is only 10% compared to Hasbro who didn't recall any toy this year.

One factor is that it is almost impossible to avoid Chinese made toys, even if you want to... Customers surveys indicate that people would rather "avoid non-made in China" toys which is virtually impossible to put in practice since the regulation in many countries doesn't make it mandatory to mention the origin of the toys anymore, and simply because - As the (very bad) book "A year without made in China" tried to demonstrate - living without made in China products is almost mission impossible since only a handfull of toys are not of Chinese origin...

Let's compare with Hasbro, Mattel's major competitor, who recently advertised in newspapers ads that they had had no recall in the past years.

Mattel is down -17% and Hasbro is "only" down -7%
Obviously, the Mattel and other recalls had an impact on Hasbro's stockprice, as customers don't make the difference at first glance to the toys shelves, but the gap is "only" 10%...

Does it mean that the professionnalism and toy safety are worth only 10% of a toys company's value ?