The management at Mattel (MAT) know the Consumer Product Safety Commission. According to The Wall Street Journal "manufacturers must report all claims of potentially hazardous product defects within 24 hours." But, Mattel has taken several months to make such reports, and, on more than one occasion. The most recent was last month’s recall of nearly 18 million toys.
Mattel’s position is that "the company discloses problems on its own timetable because it believes both the law and the commission’s enforcement practices are unreasonable." A bit like saying it is OK to drive drunk because you don’t think the laws about DWI are fair.
This is just the kind of activity that Congress loves to investigate. Big companies that like to try to get around federal regulations.
Mattel has already done a great deal to alienate its shareholders. Over the last three months, the company’s shares are down 23% as concerns increase over the size and cost of Mattel toys made in China. The company hardly has a spotless track record screening its products for safety.
And now, it is taunting the government.
Douglas A. McIntyre
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