A Lesson That Thomas Could Teach

For the past two decades, US firms have relied on an outsourcing strategy: They move manufacturing operations overseas where they can employ workers for low wages, distancing themselves from production and condoning secrecy about factory practices. But this strategy has repercussions: After learning that Thomas the Tank Engine toys, manufactured in China, have lead paint, businesses tried to evade responsibility while angry parents assigned blame to all parties involved. The manufacturer, RC2 Corporations, recalled the toys, while offering little information. HIT Entertainment, the British firm that owns the Thomas brand, denied responsibility and placed a small link on their website to the RC2 recall announcement. Such a response does little to build consumer trust for a beloved brand. When a safety problem emerges, consumers do not limit their outrage to any particular supplier, and companies can’t distance themselves from mistakes made by a factory in a far-off land. Product reputation and survival are at stake when it comes to a problem at any stage of the manufacturing process. – YaleGlobal