UPDATE on Fisher-Price Toys

Less than two weeks after Mattel Inc. recalled 1.5 million Chinese-made toys because of lead paint, the toy industry is bracing for another blow that could give parents more reason to rethink their purchases just before the critical holiday shopping season.

Mattel is set to announce the recall of another toy involving a different Chinese supplier as early as Tuesday, according to three people close to the matter who spoke on condition of anonymity because of the sensitivity of the situation.

As I suspected, the second paragraph confirms that the problems were not in a Fisher Price owned factory, but at a contract factory.

Days after the Fisher-Price recall, Chinese officials temporarily banned the toys' manufacturer, Lee Der Industrial Co., from exporting products. A Lee Der co-owner, Cheung Shu-hung, committed suicide at a warehouse over the weekend, apparently by hanging himself, a state-run newspaper reported Monday.

Lee Der was under pressure in the global controversy over the safety of Chinese-made products, and it is common for disgraced officials to commit suicide in China.

Wow. SPECULATION ALERT: I wonder though, if he might have killed himself out of financial anguish (going bankrupt) than some sense of guilt. If you're willing to use lead paint on toys to make a buck, are you really going to feel more shame over being caught or more shame about losing your factory (and thus "face" in Chinese culture?) Chinese factories have massive amounts of "ho lien pi" = thick facial skin. Though, I think this does mean this guy probably made the decision to substitute the paint rather than just being duped by the paint supplier. Either way, this story is getting big.

Before this month, Fisher-Price and parent company Mattel had never before recalled toys because of lead paint.

Bingo. Like I said before, the whole toy industry is very aware of lead-based paint being a no-no. They have been making toys in China for a long time and probably do a lot of testing. I am going to speculate some more that through bribery the contractor avoided testing, got fake test reports, or bribed the inspector to take hand-made samples for testing.

From BBC:

An internal investigation found the toys had been made using a non-approved paint pigment which contained excessive amounts of lead, violating safety standards.

A manager at Lee Der blamed its paint supplier for the incident, according to the Southern Metropolitan Daily.

From CNN:

Cheung was a co-owner of Lee Der, according to a registry of Hong Kong companies. The other owner, Chiu Kwei-tsun, did not return telephone messages left for him.

In its report, the Southern Metropolis Daily said Cheung, a Hong Kong resident in his 50s, treated his 5,000-odd employees well and always paid them on time. The morning of his suicide, he greeted workers and chatted with some of them, the report said.

After the recall, Lee Der maintained that its paint supplier, Cheung's best friend, supplied "fake paint" used in the toys, the Southern Metropolis Daily said.

"The boss and the company were harmed by the paint supplier, the closest friend of our boss," Liu, the manager, was quoted as saying.

...
In announcing the temporary export ban against Lee Der, a government quality inspection agency also slapped a similar prohibition on Hansheng Wood Products Factory and said police were investigating both companies' use of "fake plastic pigment." Such pigments are a type of industrial latex used to make surfaces smoother and shinier.

Okay, so perhaps it is the paint supplier after all, and the guy killed himself out of remorse. But this WP quote seems to say my thesis was correct:

"I think the company is about to go bankrupt," said an executive of a Lee Der subsidiary who would not give his full name because of the sensitive nature of the subject matter. "Otherwise, he wouldn't have committed suicide."

This story also says who the paint supplier was:

The paint was sold to Lee Der by Dongxing New Energy, which is headed by Liang Jiacheng, one of Zhang's best friends, colleagues said. It was not known whether Dongxing also was the supplier for Hansheng.