President's Letter – April 2009
I sincerely hope you and your company have weathered the tough
economic and regulatory environment of Q1 09. During this time, TIA has
been working vigorously behind the scenes to communicate with CPSC,
Members of Congress and media about the consequences the Consumer
Product Safety Improvement Act (CPSIA) is visiting on toy companies,
especially the small businesses that make up the vast majority of
companies in the industry. Here are some of the noteworthy activities
we’ve undertaken – and some new initiatives as well –
on behalf of the industry.
INDUSTRY RALLY IN WASHINGTON
On Wednesday, April 1, I will be one of the speakers
representing the toy industry at a rally on Capitol Hill to raise
awareness about the tremendous impact the CPSIA is having on companies
in the toy industry. TIA Board member Etienne Veber and his colleague
Rick Woldenberg of Learning Resources have done the heavy lifting to
organize this rally. (See the article in the March 31 issue of Toy News
Tuesday to learn how you can add your voice to these efforts.)
The data that TIA has gathered from nearly 400 companies in the toy
business confirm that the requirements of the Act may result in nearly
$2 Billion in write downs of unsold inventory. Moreover, nearly 40% of
those responding to the survey say they plan to reduce employment
because of the effects of the Act. Ironically, these negative
consequences come despite the fact that there have been no reports of
any children harmed by toys related to lead or phthalate
content.
Our industry has long been at the forefront in developing new
standards to address safety issues relating to toys. We did the
responsible thing in 2007 by initiating and supporting a new federal
requirement for testing toys to assure they meet our tough safety
standards. What emerged from Congress, however, went far beyond anything
justified by the recalls that year. Written and passed in haste, with
dreadful and unforeseen consequences, the CPSIA must be reconsidered and
amended to assure that it accomplishes the worthwhile objective of
enhancing toy safety without ruining the responsible and creative U.S.
toy industry that has lead the world in toy safety for decades.
BOARD, RETAILERS REAFFIRM SUPPORT FOR
TSCP
In a special 3-hour meeting March 17, the TIA Board undertook a detailed
review of the components of the Toy Safety Certification
ProgramSM (TSCPSM) that will offer toy companies
an efficient and cost-effective mechanism to assure compliance with the
requirements of the CPSIA. The voluntary Program, being developed by TIA
with the help and support of a broad consortium of manufacturers,
retailers, labs, consumer advocates, and government, is nearing
completion and is expected to begin accepting applications for
certification in about 90 days. The Program will assist smaller
manufacturers by guiding them through the compliance requirements using
a web-based application process. Manufacturers will be able to
select any laboratory or service provider accredited by ANSI to certify
their products and use any CPSC accredited lab for the tests required by
the Act.
Over the past three weeks we have also met with the major toy
retailers to thoroughly examine the components of the Program to assure
that TSCP certification will be sufficient to meet their stringent
safety assurance requirements. The retailers affirmed their support for
an industry-wide Program for meeting the CPSIA requirements, and
acknowledged the benefits of reduced testing to minimize cost
burdens.
Among the important benefits of the TSCP for toy companies are the
eventually reduction of redundant testing required by
retailers (majors and mid-tier); demonstrable,
responsible adherence to industry-wide practices for safety
assurance; functional guidance for fulfilling CPSIA and
CPSC requirements (helpful for smaller companies); enhanced
credibility of certification resulting from ANSI/TIA
sponsorship and oversight; economical service provided
by a not-for-profit toy industry controlled administrator; and
the use of any accredited lab to achieve CPSC
benefits.
For the entire toy industry, the TSCP promises to deliver
enhanced conformance of toys with safety standards;
increased government, media, retailer and consumer
confidence in toy industry and products; a
non-governmental, industry-wide system to satisfy CPSIA
certification requirements; and accessible, affordable and
credible certification for all size toy companies.
TIA PROVIDES ASSISTANCE FOR SMALLER MEMBERS
On March 24 we hosted a special webinar for smaller member
companies of TIA to help them understand the new requirements of the
CPSIA and cope with other challenges of the toy business.
Recognizing that many smaller toy companies do not have staff to help
them navigate the complexities of new requirements, TIA department heads
were available on the webinar to respond to questions about the CPSIA as
well as other issues confronting their business. While TIA cannot
provide legal counseling for individual companies, there are many
general aspects of the new requirements that we can help
decipher.
We plan to continue and improve these webinars and provide new paths
for smaller members to obtain full value from their TIA membership.
TIA’s largest members fully support the association’s
outreach to smaller companies, and they recognize that TIA can help
provide the assistance needed to assure that all companies in the toy
industry can efficiently and reliably compete and thrive in the new
environment.
CUTTING COSTS WITHOUT CUTTING SERVICES
Like most companies in the toy industry, TIA has been
scrubbing its expenses to reduce costs and eliminate any non-essential
activities to stay well within our budgets for 2009. TIA’s
membership renewals have held up well, new members are joining, and dues
revenues slightly exceed our conservative budget for the year. But Toy
Fair revenues were down a modest 3%, so we must find ways to further cut
costs despite increasing needs for lobbying and regulatory activities at
the state and federal level. We will be cutting travel and overhead
expenses, and finding new ways to serve you at lower cost. For example,
our Annual Report this year will be published electronically, saving
more than $20,000 in printing costs.
Despite the cost cutting, we’ve managed to increase the
frequency of our e-news updates to help you keep you current with
information you need for your business. We hope you have found our new
weekly Toy News Tuesday e-publication helpful, and look forward to any
comments or suggestions you may have to make it even more relevant to
you and your business.
Once again, thank you to all of our loyal members for your continued
support. We couldn’t do what we do for the toy industry without
your encouragement and active participation, and we look forward to even
more valuable collaboration with you in the weeks and months ahead.
Wishing you a successful and profitable Q2,
Carter Keithley
|
