President's Letter – April 2009

Back to main page

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