China Isn't the Problem — and Neither Is Outsourcing
by Greg Perry
Over the past few weeks, the media has plastered headlines with news of tainted imported Chinese-manufactured goods like toys coated with lead-based paint. Just this week, Mattel recalled 800,000 lead-tainted Barbie dolls and accessories. All made in China.
How dare those Chinese! They want to kill all of us!
The truth is, the Chinese don't want to kill all of us because we are their customers. If you owned a store, would you want to kill your customers? Doing so doesn't lend itself to good business practices. Sure, the Chinese are still red as a nation in many ways but capitalism is turning the tide powerfully. I'd say that the Chinese have made almost as big of a change away from communism and socialism towards freedom as America has moved from freedom to socialism in the past 2 decades.
I traveled throughout China in 1995. I hated it. Change was in the air but it was air filled with the heaviest pollutants I've ever experienced and I've traveled the globe a lot. The people actually seemed to be gray in their faces, not unlike the Terra-Cotta army we saw at Xian. Even the children had that gray, staring-through-you look. Years of mass oppression does that. In just the 12 years that have followed, I've seen pictures and videos from many towns we visited and the difference seems stunning. The infrastructure appears vastly improved, the available services are obviously superior, and they have dramatically moved toward a western-like feel in their outlook, in spite of the long way they still have to go.
Who's To Blame?
China is not the primary culprit here.
Mattel is just one of the most recent examples of recalled Chinese goods so I'll stick with Mattel for this article but the same applies to any and all companies who hire China-based manufacturing plants to make goods that will be sold here in the United States.
The term Chinese goods is bandied about in these stories. The problem is they are not really Chinese goods. They are Mattel goods.
In this recent Barbie doll case, Mattel is the primary culprit, or put in better terms, Mattel is the organization responsible for this recall. I'm not saying China didn't use lead-based paint. I'm saying even if China put skin-absorbing cyanide in the Barbie dolls, Mattel would still be responsible.
Suppose Mattel built a plant in Nebraska and hired legal American workers to make those Barbie items. Further suppose one of the purchasing agents there, a direct employee of Mattel, decided to buy lead-based paint for the toys because the plant could show a higher profit margin and he could more easily keep his job. If that happened, Mattel would be proper in issuing a national recall of all affected items. Just as Mattel is proper in recalling the Chinese-made toxic items now.
The difference I believe would be the public's perception. Everybody would perceive it as being an internal problem in Mattel. It would be a problem of quality control. If such an item were made and sold in Nebraska, it would be obvious that Mattel had a serious break-down in the quality control of its products.
Nothing changes just because Mattel outsourced the manufacturing to China. Mattel still has a breakdown in quality control.
Americans Seem to Blame the Chinese
Again, I'm using Mattel as the example only because it's been so recently in the news. Many other companies have recalled Chinese-imported goods recently too. Mattel is probably not any better or worse than those others. I have not directly heard a Mattel spokesperson blame China directly and that's not the point of this article. The point I want to stress is that Americans are blaming China in all the follow-up media segments about these tainted goods.
I hear an outcry in the media when they interview people on the streets about these defected, and often dangerous, goods. But the people's outcry is typically aimed toward China or outsourcing.
The Bottom Line of Blame
Here is the full extent of China's blame: If Mattel required lead-free paint to be used, and the Chinese plant used lead-based paint, then China broke a contract and is liable to Mattel for damages. It's a contractual violation and Mattel needs to determine whether international courts should be involved, or whether Mattel just cancels the contract and uses someone else in the future. Either way Mattel should have its own people in place to monitor all manufacturing processes, all products of manufacturing, and Mattel should test all products made in its name. If Mattel doesn't do that — either in China or in Nebraska — then Mattel is putting itself in the crosshairs of liability.
Lew Rockwell Readers Have Brains
It seems as though LewRockwell.com readers generally have more brain cells than the typical American. I believe that it's in the best interest of national debate and of critical thinking in general when we correct a mistake we hear, especially when we hear someone improperly blamed for a situation.
The difference I'm describing here may not be huge. China may be responsible — well, they certainly are responsible for putting the lead paint in those toys — but China is not primarily responsible.
Mattel, the company that took the risk in hiring the Chinese, is the responsible party. The reason outsourcing to China is cheaper than outsourcing to Nebraska is not just because of the wage differences but also the quality differences. So if you do make the business decision to outsource to another country to save money, one of the expense decisions your company must make is to factor in costs of extra production and quality control. If you don't put your own production controls in place before selling a product made anywhere on earth, you'll very likely be interviewed on a news segment soon.
You'll be explaining why those baby diapers were sold with waste products already in them before they ever touched a baby's behind.
September 7, 2007
Greg Perry [send him mail] is the pistol-packing author of more than 75 books. What he does best is teach others how to maximize their eBay income. That's because he smashes his eBay competitors by implementing time-proven Direct Marketing techniques that others completely ignore. If you've ever considered eBay, you'll make far more money when you read his profit-boosting book, eXtreme eBay — How to Quickly Apply the Most Powerful Direct Marketing Techniques in the World to Every Item You Sell on eBay.
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