JoeCustoms.com :: View topic - Chinese Toy Firm Goes Bust! Mattel's major supplier

A Chinese toymaker which supplied firms including US giant Mattel has gone out of business with the loss of up to 7,000 jobs.

Rising raw material and labour costs and slowing US demand forced Smart Union to close its doors this week.

Workers have since been protesting outside the firm's factories and a government building in Guangdong province to demand their unpaid wages.

More than half of China's toy exporters have gone bust so far this year.

Hard times in Toytown

The Chinese news agency Xinhua said 52.7% of the country's 3,631 companies making toys for export went out of business in the first seven months of the year.

It blamed rising production costs, the stronger yuan and tightened toy safety standards.

Smart Union's shares were suspended on the Hong Kong exchange on Wednesday and provisional liquidators were appointed by the High Court in Hong Kong on Friday.

The company's financial difficulties were clear from the results it released last month - Smart Union made a pre-tax loss of 201m Hong Kong dollars ($26m; £15m) in the first half of the year. In the same period a year earlier it had lost HK $2.5m.

Pay withheld

Former staff protesting outside one of Smart Union's factories were met with a sign which read, "Because business is bad, we are unable to give you your salaries," the Reuters news agency reported.

"I feel very agitated now," said factory worker Huang Luo Hui.

"We need money to pay for our housing and food. We have been waiting for a few days now. The government said they will solve this problem in three days. Today [Friday] is the third day and we have had no reply from them."

Author:	Kambei [ Fri Oct 17, 2008 12:35 pm ]
Post subject:	Chinese Toy Firm Goes Bust! Mattel's major supplier
Found this on the BBC news site: Quote: A Chinese toymaker which supplied firms including US giant Mattel has gone out of business with the loss of up to 7,000 jobs. Rising raw material and labour costs and slowing US demand forced Smart Union to close its doors this week. Workers have since been protesting outside the firm's factories and a government building in Guangdong province to demand their unpaid wages. More than half of China's toy exporters have gone bust so far this year. Hard times in Toytown The Chinese news agency Xinhua said 52.7% of the country's 3,631 companies making toys for export went out of business in the first seven months of the year. It blamed rising production costs, the stronger yuan and tightened toy safety standards. Smart Union's shares were suspended on the Hong Kong exchange on Wednesday and provisional liquidators were appointed by the High Court in Hong Kong on Friday. The company's financial difficulties were clear from the results it released last month - Smart Union made a pre-tax loss of 201m Hong Kong dollars ($26m; £15m) in the first half of the year. In the same period a year earlier it had lost HK $2.5m. Pay withheld Former staff protesting outside one of Smart Union's factories were met with a sign which read, "Because business is bad, we are unable to give you your salaries," the Reuters news agency reported. "I feel very agitated now," said factory worker Huang Luo Hui. "We need money to pay for our housing and food. We have been waiting for a few days now. The government said they will solve this problem in three days. Today [Friday] is the third day and we have had no reply from them." I wonder how this is going to hit the new DC line that Mattel is putting out, and how many more toy firms, Hasbro in particular, are in danger of having their supplies affected.

Author:	jollyroger [ Fri Oct 17, 2008 12:37 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
with Joes at 7.99, I can't see the cost going THAT much further up switching to american Factories. At least the figures would be done quicker lol.

Author:	Kambei [ Fri Oct 17, 2008 12:39 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
Interesting that teh Chinese news agency chose improved safety standards as one of the reasons for the firm's demise, especially in the light of the recent scare with milk products over there.

Author:	JBYRDD [ Fri Oct 17, 2008 12:54 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
WOW, sad news for those workers.

Author:	Mike T. [ Fri Oct 17, 2008 1:02 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
Quote: Interesting that teh Chinese news agency chose improved safety standards as one of the reasons for the firm's demise, This is the real reason for those numbers. Most of these "toy makers" are making the cheap knock off junk you buy in the dollar stores and vending machines of the world. Many more countries have passed increasing toy safety standards in recent years...most as a direct result of the poor quality of the Chinese toys. (Funskool was a major lobbying force in India to increase toy safety standards in response to a rash of cheap, poor quality, Chinese imports.) As such, the more likely result will be decreased amounts of of those cheap-o toys you see. The major American toy manufacturers will have the pockets to secure facilities so I don't see it affecting the flow of the higher quality merchandise in the long term. If anything, this might make resources more available and the ability for someone to secure smaller production runs of certain exclusives might be more viable.

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Author:	yjagg [ Fri Oct 17, 2008 1:26 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
JBYRDD wrote: WOW, sad news for those workers. hopefully good news for the US plastic mfg's all my clients in that industry have had some rocky times of late

Author:	Kambei [ Fri Oct 17, 2008 1:27 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
I am wondering how this is going to affect firms like Chap Mei

Author:	GITrekker [ Fri Oct 17, 2008 1:37 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
As if DC Universe toys aren't hard enough to find right now. Wonder if it'll impact Masters...

Author:	yjagg [ Fri Oct 17, 2008 1:54 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
Kambei wrote: I am wondering how this is going to affect firms like Chap Mei well maybe they will start offering more of their stuff here to make $, one $8 joe or 2 or 3 Solider guys for $5...not a tough call for a cash strapped parent

Author:	Luftshutze [ Fri Oct 17, 2008 1:57 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
All my Mattel figs are rotting; Battlestar, Flash Gordon, Captain power. The plastic limbs are getting sticky and are starting to bubble.

Author:	raptor [ Fri Oct 17, 2008 1:58 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
Another nail in the casket of the "Dollar Store". I don't know whether to laugh or cry. - R

Author:	Goldbug [ Fri Oct 17, 2008 8:26 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
I can't remember for sure but some large toy company was going to switch all their manufacturing to Malaysia or Indonesia.

Author:	PaidLoad [ Sat Oct 18, 2008 6:22 am ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
"highly agitated"...right, good translation there. how do you say "unbelievably pissed" in chinese? lol

Author:	DavAnthony [ Sun Oct 19, 2008 1:39 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
Time for the U.S. to start making it's own toys again and bring some of the business back here.

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Author:	Macrossmaster [ Sun Oct 19, 2008 2:34 pm ]
Post subject:	Re: Chinese Toy Firm Goes Bust! Mattel's major supplier
Mike T. wrote: (Funskool was a major lobbying force in India to increase toy safety standards in response to a rash of cheap, poor quality, Chinese imports.) THIS is how you know quality standards are going to hell in a handbasket.