Mark Ralston / AFP - Getty Images file A Chinese boy holding a Mattel "Barbie and Tanner" still for sale in China despite being recalled in the U.S., at a department store in Shanghai last month. Mattel issued an extraordinary apology to China Friday, saying it was to blame for design flaws.

Peter Parks / AFP - Getty Images Thomas Debrowski, Mattel's executive vice president of worldwide operations, left, holds talks with Li Changjiang, head of China's top agency in charge of supervising product quality in Beijing, Friday. Debrowski apologized to China over massive recalls of toys made in China.

BEIJING - U.S.-based toy giant Mattel Inc. issued an extraordinary apology to China on Friday over the recall of Chinese-made toys, taking the blame for design flaws and saying it had recalled more lead-tainted toys than justified.

The gesture by Thomas A. Debrowski, Mattel's executive vice president for worldwide operations, came in a meeting with Chinese product safety chief Li Changjiang, at which Li upbraided the company for maintaining weak safety controls.

"Our reputation has been damaged lately by these recalls," Debrowski told Li in a meeting at Li's office at which reporters were allowed to be present.

"And Mattel takes full responsibility for these recalls and apologizes personally to you, the Chinese people, and all of our customers who received the toys," Debrowski said.

The carefully worded apology, delivered with company lawyers present, underscores China's central role in Mattel's business. The world's largest toy maker has been in China for 25 years and about 65 percent of its products are made in China.

The fence-mending call came ahead of an expected visit to China by Mattel's chairman and chief executive, Robert A. Eckert. Following the massive recall, Eckert told U.S. lawmakers he wanted to see Mattel's mainland inspections first hand.

Mattel ordered three high-profile recalls this summer involving more than 21 million Chinese-made toys, including Barbie doll accessories and toy cars because of concerns about lead paint or tiny magnets that could be swallowed.

The recalls have prompted complaints from China that manufacturers were being blamed for design faults introduced by Mattel.

On Friday, Debrowski acknowledged that "vast majority of those products that were recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in China's manufacturers."

Lead-tainted toys accounted for only a small percentage of all toys recalled, he said, adding that: "We understand and appreciate deeply the issues that this has caused for the reputation of Chinese manufacturers."

The slew of Chinese-made toys since June by Mattel and other smaller toy makers has resulted in many parents scouring for U.S.-made label stamped on playthings at toy stores. That is no easy feat when more than 80 percent of toys sold in the U.S. are made in China.

Mattel's mea culpa could help reshape the debate surrounding Chinese-made toys.

In fact, new research from two business professors shows that recalls due to problems with the U.S. maker's design accounted for the vast majority _ about 76 percent _ of the 550 U.S.toy recalls since 1988.

The report, released earlier this month from Paul R. Beamish, an international business professor at Canada's University of Western Ontario, and Hari Bapuji, business professor at University of Manitoba's I.H. Asper School of Business in Winnipeg, Canada, found that recalls blamed on design problems and manufacturing defects, such as lead paint or poor craftmanship, both rose in the past two years as U.S. makers have shifted more of their production to China.

But they noted that, "if shifting manufacturing to China resulted in poorer quality goods, then the number of toys recalled due to manufacturing should be greater than the number recalled due to design," the report said. But that is not the case.

"Nobody gets a free ride on this," said Beamish, arguing that toy makers' obsession to quickly get new products to market before they are widely copied has resulted in a lot of cost-cutting and inadequate testing.

In a statement issued by the company Friday, Mattel said its lead-related recalls were "overly inclusive, including toys that may not have had lead in paint in excess of the U.S. standards.

"The follow-up inspections also confirmed that part of the recalled toys complied with the U.S. standards," the statement said, without giving specific figures.

The co-owner of the company that supplied the lead-tainted toys to Mattel, Lee Der Industrial Co. Ltd., committed suicide in August shortly after the recall was announced.

Li reminded Debrowski that "a large part of your annual profit ... comes from your factories in China.

"This shows that our cooperation is in the interests of Mattel, and both parties should value our cooperation. I really hope that Mattel can learn lessons and gain experience from these incidents," Li said, adding that Mattel should "improve their control measures."

Li, the head of China's General Administration of Quality Supervision, Inspection and Quarantine, also expressed his appreciation for Debrowski's "objective and responsible attitude toward the recent toy recall."

Chinese food, drugs and other products ranging from toothpaste to seafood are under intense scrutiny because they have been found to contain potentially deadly substances.

But China has bristled at what it claims is a campaign to discredit its reputation as an exporter. It accuses foreign media and others of playing up its product safety issues as a form of protectionism.

Beijing insists that the vast majority of its exports are safe but has stepped up inspections of food, drugs and other products in response to the concerns.

Li told reporters after meeting with Debrowski that the government had taken swift action against Lee Der, shutting down its operations and revoking its business license. Four people from the company also face criminal charges, he said, without giving details.

Since this summer's recalls Mattel has announced plans to upgrade its safety system by certifying suppliers and increasing the frequency of random, unannounced inspections. It has fired several manufacturers.

Tests had found that lead levels in paint in recalled toys were as high as 110,000 parts per million, or nearly 200 times higher than the accepted safety ceiling of 600 parts per million.

Mattel's shares fell from the mid-$23 level following the first recall in early August, reaching as low as $20.97 on Sept. 10. They have since rebounded, and rose 55 cents, or 2.33 percent to $24.11 in morning trading Friday..

China has become a center for the world's toy-making industry, exporting $7.5 billion worth of toys last year.

URL: http://www.msnbc.msn.com/id/20903731/

    Honesty is good for business, whether the motive for being honest is altogether altruistic or not. Mattel Inc., the American toy maker, taking responsibility for the bad toys made in China was probably due more from economic necessity than purely moral necessity, as toys being made in China is necessary to maintain the American toy makers profit margin. Seeing that China hasn't recalled any Mattel toys in it's homeland, Mattel's assertion that it overreacted in the recall, may relieve some American buyers of concern about Mattel toys. (Mattel certainly hopes so). I hate to be cynical, but I have a suspicion that all these carefully worded apologies (with lawyers present) are designed to maintain the "status quo" of one giant American manufacturer continuing to outsource millions of American jobs overseas. This is a great time for a quality "made in America" toy maker to arise and give American consumers a choice. Right now we have none! (Please trackback to a recent relevant post about China)